LifeLock reports IRS flagged $16.5 billion in possible refund fraud

LifeLock and government sources said the Intelligent Reflecting Surface (IRS) flagged $16.5 billion in refunds for possible identity fraud in 2024, and LifeLock released research showing tax scams were interfering with refunds and causing delays and financial losses for affected Americans.

The research found more than one in four tax-paying Americans had experienced identity theft, with an average loss of $8,401 and individual losses reported as high as $75,000; funds intended for savings, bills, or investments were sometimes redirected to criminals. The release also said 79% of Americans planned to take steps to protect themselves from tax scams in 2026.

The study reported that 23% of Americans planned to use Artificial Intelligence (AI) tools such as ChatGPT, Gemini, or Copilot to assist with tax filing, with 32% of Gen Z and 38% of Millennials indicating intent to use AI. Among those planning to use AI, 51% said they would be comfortable with step-by-step guidance, 47% with AI explaining tax terms or deductions, and 41% with AI filing on their behalf. Norton 360 with LifeLock plans included always-on, AI-powered scam protection to detect sophisticated scams across web, phone calls, texts, emails, and videos in milliseconds.

LifeLock recommended several precautions in the release: use reputable tax preparers and trusted software, limit personal details shared with AI tools, type IRS.gov and tax provider URLs directly into a browser instead of clicking links, be skeptical of urgent messages, file early, and consider expert support. The survey was conducted online within the United States by Dynata on behalf of Gen from November 20 to November 26, 2025 among 1,000 adults and data were weighted where necessary.

“Tax season has become one of the riskiest times of year for your identity, especially as more Americans rely on digital tools and AI to manage their taxes,” said Ian Bednowitz, General Manager of LifeLock.

“Scammers are using AI, fake IRS messages and fraudulent tax preparers to intercept personal data and hijack refunds. A tax return is a treasure trove of information for a criminal. When fraud happens, the impact can stretch well beyond tax season, disrupting financial plans and creating long recovery timelines for victims. Taking steps to protect your identity before you file can help reduce that risk.”