Digital Shift Accelerates Mobile Tax Payments 27 Percent in 2022: ACI Worldwide

Ghost tax preparer scams doubled in 2022 compared to previous year, affecting Gen Z and Millennials most

New tax payments data from ACI Worldwide, the global leader in mission-critical, real-time payments software, shows usage of mobile for paying taxes increased 27 percent from 2021 to 2022. In addition, an ACI-commissioned YouGov study shows that check preference continued to decline—from 21 percent in 2021 to 18 percent in 2022. The largest reduction in check preference came from Gen Z (13% in 2021 to 5% in 2022), followed by Millennials (11% in 2021 to 8% in 2022) and Gen X (22% in 2021 to 18% in 2022).

“The IRS provides helpful tips on how to choose a tax preparer to safely file and other tips on staying vigilant during tax season.”

“We continue to see interest in alternative payments when it comes to paying taxes,” said Sanjay Gupta, head of biller segment, ACI Worldwide. “Digital and alternative methods of payment are more secure than paper-based payments, and taxpayers are seeking more digital options to pay their taxes. ACI works with government organizations to offer multiple digital payment methods—including PayPal, Venmo, direct ACH debit, credit and debit cards—increasing taxpayer satisfaction and reducing processing costs.”

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While the ACI-commissioned YouGov study showed that twice as many Gen Z taxpayers are using a tax professional to file their taxes in 2022 (31%) than in 2021 (14%), reports of ghost preparer scams have doubled since 2021 (2% in 2021 to 4% in 2022), affecting Gen Z and Millennials the most—with 11 percent and 7 percent, respectively, reporting that they have experienced this type of scam. In addition, 33 percent of taxpayers have experienced tax scams (including phone or email scams, illegal or ghost preparer scams and identity theft). Moreover, awareness of tax scams (whether phone or email scams, illegal or ghost preparer scams and identity theft) is lower among Millennials (79%) and Gen Z ( 83%) compared to Gen X (87%) and Baby Boomers (86%).

“Lower awareness around tax fraud can make taxpayers more susceptible to scams,” Gupta continued. “The IRS provides helpful tips on how to choose a tax preparer to safely file and other tips on staying vigilant during tax season.”

In 2021, according to ACI tax payments data, many taxpayers opted to use their debit cards as the preferred method for paying taxes closer to the tax deadline. This was true in a majority of states, including Florida (63% compared to 33% who used credit cards), Alabama (57% compared to 43% who used credit cards), South Carolina (73% compared to 26% who used credit cards) and Illinois (54% compared to 44% who used credit cards). However, in the last three years, taxpayers in some states showed a preference for credit cards over debit cards closer to the tax deadline, including Washington (57% in 2021, 57% in 2020, 60% in 2019) and Wisconsin (56% in 2021, 56% in 2020, 60% in 2019).

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Other key findings and trends include:

YOUGOV DATA
Digital and Alternative Payments

• 3 percent of taxpayers are likely to use an alternative payment method (PayPal, Venmo, Apple Pay, Google Pay, etc.), including 6 percent of Gen Z and 5 percent of Millennials

Check Usage

• The largest reduction in check preference comes from Gen Z (13% in 2021 to 5% in 2022), followed by Millennials (11% in 2021 and 8% in 2022) and Gen X (22% in 2021 to 18% in 2022)
• More taxpayers in the Northeast (22%) prefer to mail a check compared to the West (13%), South (19%) and Midwest (20%)

Tax Scams

• At 12 percent, reports of identity theft are higher in the Northeast compared to the national average of 9 percent;
  • Gen X is consistently most affected by identity theft compared to other generations
    • Gen Z – 8 percent
    • Millennial – 8 percent
    • Gen X – 12 percent
    • Baby Boomer – 8 percent