From AI-Powered Filers to Tax Refund Thieves: LifeLock Reveals New Insights on the High Cost Fraud Paying Americans Endure

Rhea-AI Summary

LifeLock (NASDAQ: GEN) warns tax-season fraud is growing and offers consumer guidance. Key findings: the IRS flagged $16.5 billion in 2024 refunds for possible identity fraud, >1 in 4 taxpayers report identity-theft experience, and the average LifeLock victim loss was $8,401.

LifeLock highlights rising AI use for tax filing (23% plan to use AI) and recommends trusted tax services, filing early, using official IRS sites, and Norton 360 with LifeLock for proactive scam protection.

Positive

• IRS flagged $16.5 billion in potential refund fraud in 2024
• LifeLock reports average victim loss of $8,401
• 23% of Americans plan to use AI tools for tax filing (survey result)
• 79% of Americans plan to take steps to protect against tax scams in 2026

Negative

• More than 1 in 4 tax-paying Americans have experienced identity theft
• Some victims reported losses up to $75,000
• Rising AI adoption risks false security and increased exploitation by scammers
• Scammers using AI, fake IRS messages, and fraudulent preparers to hijack refunds

News Market Reaction – GEN

-0.83%

-0.83% Session close to close

In the Feb 2 session, GEN declined 0.83%, reflecting a mild negative market reaction.

Data tracked by StockTitan Argus on the day of publication.

Market Context

This announcement highlights the growing intersection of AI, tax filing, and identity theft, citing ...

Analysis

This announcement highlights the growing intersection of AI, tax filing, and identity theft, citing $16.5 billion in refunds flagged for possible fraud and average losses of $8,401 per victim. It reinforces GEN’s positioning around LifeLock and Norton-branded AI protections, consistent with prior AI-focused threat reports and product launches. Investors may watch how adoption of AI tools for taxes and rising scam awareness influence demand for GEN’s cyber-safety and identity services over time.

Key Figures

Refunds flagged: $16.5 billion Victim rate: More than 1 in 4 Average loss: $8,401 +5 more

8 metrics

Refunds flagged $16.5 billion IRS refunds flagged for possible identity fraud in 2024

Victim rate More than 1 in 4 Share of tax-paying Americans victimized by identity theft

Average loss $8,401 Average financial loss per identity theft victim in LifeLock research

Maximum loss $75,000 Highest individual loss reported among identity theft victims

AI tax filers 23% Americans planning to use AI tools to help file taxes

Gen Z AI usage 32% Gen Z planning to use AI tools for tax filing

Millennial AI usage 38% Millennials planning to use AI tools for tax filing

Protection plans 79% Americans planning steps to protect from tax scams in 2026

Previous AI Reports

5 past events · Latest: Jan 27 (Positive)

Same Type Pattern 5 events

Date	Event	Sentiment	24h Move	Catalyst
Jan 27	AI consumer insights	Positive	-1.6%	Norton study on AI relationships, loneliness trends and rising dating scams.
Dec 02	AI browser launch	Positive	-0.1%	Global free release of Norton Neo AI-native browser with cyber safety features.
Nov 12	AI mobile security	Positive	-0.5%	Launch of Avast Scam Guardian AI scam protection on Android and iOS.
Nov 03	AI protection expansion	Positive	-0.3%	Global expansion of Norton’s AI-powered Scam Protection across 360 and mobile plans.
Oct 28	AI threat report	Neutral	-0.5%	Q3 2025 Threat Report on rapid growth in AI‑driven cybercrime and scams.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Pattern Detected

Recent AI-tagged releases for GEN have generally been positive product or research updates but were followed by mostly mild negative price moves, suggesting a pattern of skepticism or limited upside reaction to AI-related news.

Recent Company History

Over the last few months, GEN has issued multiple AI-focused announcements, from Norton’s "Artificial Intimacy" study on AI relationships (Jan 27, 2026) to launches like Norton Neo, an AI-native browser (Dec 2, 2025), and Avast’s AI-powered mobile scam defense (Nov 12, 2025). It also expanded Norton’s AI-powered scam protection globally and highlighted AI-driven cybercrime trends in its Q3 2025 Threat Report. Today’s LifeLock study on AI-assisted tax filing and identity-theft risks fits this ongoing narrative of AI-enabled protection against increasingly sophisticated scams.

Key Terms

identity theft, tax-refund fraud, tax identity theft, IRS, +3 more

7 terms

identity theft financial

"LifeLock, the leader in identity theft protection in the U.S. and part of Gen"

Identity theft is when someone steals another person’s personal details—such as name, Social Security number, bank account or login credentials—and uses them to impersonate that person to access money, credit, or services. For investors this matters because it can lead to direct financial losses, regulatory penalties, lawsuits, and damaged customer trust that can reduce revenue and stock value, much like a break‑in that shakes confidence in a business.

tax-refund fraud financial

"protection to help reduce the risk of identity theft and tax-refund fraud"

Tax-refund fraud is a crime where someone claims a tax refund by using false, stolen or altered information to get money they are not owed. For investors, it matters because it can lead to unexpected financial losses, fines, increased compliance costs and reputational damage for a company or its service providers—similar to a business being tricked into paying a fake invoice that later requires correction and oversight.

tax identity theft financial

"If you fall victim to tax identity theft, LifeLock provides support through insurance"

Tax identity theft occurs when someone uses another person’s personal information—such as Social Security number or tax ID—to file false tax returns or claim refunds in that person’s name. It matters to investors because it can create direct financial losses, increase compliance and remediation costs, and damage customer or employee trust; for businesses, it’s like a trusted mailbox being looted, exposing companies to liability and reputational risk.

IRS regulatory

"the IRS flagged $16.5 billion in refunds for possible identity fraud"

The Internal Revenue Service (IRS) is the U.S. federal agency that collects taxes and enforces tax laws, acting like the referee and bill collector for federal taxation. Investors pay attention because IRS rules and audits affect companies’ after‑tax profits, cash flow, and legal risk—changes in tax treatment, enforcement actions, or refund timing can materially alter a company’s valuation and shareholder returns.

W2 financial

"especially sensitive information on your W2 or your Social Security number"

A W‑2 is a U.S. tax form employers give workers that lists wages earned and taxes withheld for the year, like a pay stub condensed into an official record. For investors, W‑2 data matter because payroll and compensation are major company expenses and executive salaries reported on W‑2s can signal management cost trends or potential cash outflows; think of it as a thermometer for labor-related financial pressure.

Social Security number financial

"especially sensitive information on your W2 or your Social Security number"

A Social Security Number (SSN) is a unique nine-digit identifier assigned by the U.S. government to track an individual’s earnings and eligibility for social benefits; think of it as a personal account number the government uses to link financial and tax records. For investors, an SSN matters because it is required for opening brokerage accounts, reporting taxable transactions, and verifying identity to prevent fraud — and it must be protected like a financial key to avoid identity theft.

AI-powered scam protection technical

"Norton 360 with LifeLock plans include always-on, AI-powered scam protection"

Software that uses artificial intelligence to identify, flag and block fraudulent messages, fake offers and suspicious transactions across a company’s services by learning typical patterns and spotting anomalies faster than manual checks. It matters to investors because it helps cut direct losses, protect brand reputation and reduce regulatory and litigation risk—think of it as a smart guard dog that keeps evolving to sniff out new kinds of intruders before they cause damage.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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In 2024, the IRS flagged $16.5 billion in refunds for possible identity fraud, LifeLock shares how to avoid the costly reality of tax fraud

TEMPE, Ariz. and PRAGUE, Feb. 2, 2026 /PRNewswire/ -- For many Americans, a tax refund is one of the most important financial moments of the year. Refunds help pay bills, build savings, and stabilize household budgets. New research from government sources and LifeLock, the leader in identity theft protection in the U.S. and part of Gen (NASDAQ: GEN), shows that tax scams are increasingly interfering with refunds, turning everyday tax-paying Americans into fraud-paying Americans. Victims often pay in more ways than one, facing extended delays to receive their tax refund, along with financial losses and the time-consuming process of getting their money back and restoring their identity.

More than 1 in 4 tax-paying Americans have been a victim of identity theft. According to new LifeLock research, the average loss was $8,401 per victim, with some losses as high as $75,000. In many cases, money intended for savings, bills or investments was diverted directly to criminals.

"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."

AI has become an integral part of people's everyday lives with 23% of Americans planning to use AI tools such as ChatGPT, Gemini or Copilot to help file their taxes. The idea of AI-assisted filing is especially popular among younger generations: 32% of Gen Z and 38% of Millennials say they plan to use AI, compared to 17% of Gen X and 5% of Baby Boomers.

Among those planning to use AI for taxes:

• 51% would feel comfortable with AI guiding them step-by-step through the filing process
• 47% are comfortable using AI to explain tax terms or deductions
• 41% say they would feel comfortable with AI actually filing their taxes for them

LifeLock cautions that while AI can make filing faster and more convenient, it can also give people a false sense of security if they aren't thinking about how their personal and financial data could be misused. That's when scammers step in, diverting refunds, opening new accounts or filing fraudulent returns in someone else's name.

Despite rising threats, many Americans say they plan to be more proactive this year. In fact, 79% of Americans plan to take steps to protect themselves from tax scams in 2026. LifeLock experts recommend a combination of smart habits and specialized protection to help reduce the risk of identity theft and tax-refund fraud:

1. Use reputable tax preparation services and software. Confirm your tax preparer's credentials and use well-known, trusted tax software.
2. Use AI only to get general tax advice. Limit the amount of personal details you share with any AI tool, especially sensitive information on your W2 or your Social Security number.
3. Go directly to official sites. Type IRS.gov and your tax provider's URL directly into your browser instead of clicking links in emails, texts, social posts or chatbots.
4. Be skeptical of urgent messages. The IRS will not initiate contact by email, text or social media to demand immediate payment or request personal information.
5. Use Proactive Scam Protection for peace of mind: Norton 360 with LifeLock plans include always-on, AI-powered scam protection to detect sophisticated scams across web, phone calls, texts, emails, and videos in milliseconds.
6. File early. Beat the scammers to it so they can't attempt to file in your name.
7. Get white-glove expert protection. If you fall victim to tax identity theft, LifeLock provides support through insurance and U.S.-based restoration specialists to navigate the complex process of recovery for you and save you days, if not weeks.

For more information, visit LifeLock's resource on IRS tax scams to watch out for to help protect your identity and refund this tax season.  

Methodology Statement:
The study was conducted online within the United States by Dynata on behalf of Gen from 20th November to 26th November 2025 among 1,000 adults ages 18 and older. Data are weighted where necessary by age, gender, and region, to be nationally representative.

About LifeLock
LifeLock is the leader in identity theft protection in the U.S., and a brand of Gen (NASDAQ: GEN), a global company dedicated to powering Digital Freedom through its family of trusted consumer brands. Millions of customers trust LifeLock to help protect their identities. LifeLock detects and alerts people to possible identity threats, and its dedicated Identity Restoration Specialists help people restore their identity if they do become a victim. All LifeLock members also have coverage through LifeLock's Million Dollar Protection™ Package which provides additional coverage for stolen funds and lawyer and expert support. Learn more at LifeLock.Norton.com and GenDigital.com.

Media Contact:
Jenna Torleumke 
Gen
press@gendigital.com 

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SOURCE Gen Digital Inc.

FAQ

How much did the IRS flag for possible identity-fraud refunds in 2024 and what does it mean for GEN (LifeLock)?

The IRS flagged $16.5 billion in 2024 refunds for possible identity fraud. According to LifeLock, that volume highlights growing tax-refund exploitation and underpins demand for identity protection services like Norton 360 with LifeLock.

What was the average loss per tax-identity-theft victim reported by LifeLock and how severe were some cases for GEN customers?

LifeLock found the average victim loss was $8,401. According to LifeLock, some victims reported losses as high as $75,000, demonstrating significant financial and recovery burdens for affected taxpayers.

What percentage of Americans plan to use AI tools for tax filing and why does LifeLock warn GEN investors about that trend?

About 23% of Americans plan to use AI for taxes, with higher rates among Gen Z and Millennials. According to LifeLock, increased AI use can create false security and new attack vectors that scammers may exploit.

What consumer steps does LifeLock recommend to reduce tax-refund fraud risks this season for GEN customers?

LifeLock recommends using reputable tax providers, filing early, visiting official IRS.gov, limiting AI data sharing, and using Norton 360 with LifeLock. According to LifeLock, these steps help reduce exposure to phishing and fraudulent filings.

How was the LifeLock tax-fraud survey conducted and when was the GEN-backed research fielded?

The survey was conducted online within the U.S. by Dynata for Gen from Nov 20–26, 2025 among 1,000 adults. According to LifeLock, data were weighted for age, gender, and region to be nationally representative.