Article Highlights:
The Internal Revenue Service (IRS) has announced its annual "Dirty Dozen" list of tax scams for 2025, urging individuals, companies, and tax experts to be wary of common schemes that compromise their tax and financial information. These fraudulent efforts, which vary from phishing email scams to false tax credits, tend to increase around the tax filing season, when people prepare their forms. However, they may happen at any time of year since fraudsters are always looking for new ways to steal money, personal information, and data.
The "Dirty Dozen" campaign highlights 12 frauds and schemes that pose serious risks to taxpayers. While neither a legal document or an official list of enforcement objectives, this educational endeavor seeks to raise awareness and protect taxpayers and tax professionals against common tax frauds and fraudulent acts.
Scammers continue to take advantage of the tax season to trick taxpayers into falling into different traps, which may lead to identity theft or mislead people into claiming unwarranted tax credits. For more than two decades, the IRS has focused on the "Dirty Dozen" via substantial communication and instructional outreach as part of a larger effort to protect taxpayers against fraud.
For more than a decade, the IRS has worked with state tax authorities, major tax software firms, the financial sector, and tax experts, in addition to the Security Summit activities. This group educates the public against frauds and fraudulent activities. The "Dirty Dozen" list often cautions against tax-related identity theft, bolstering the Security Summit's continuing efforts, which have successfully saved millions of taxpayers and billions of dollars in return fraud.
To strengthen these safeguards against ever-changing schemes, the IRS's 2025 "Dirty Dozen" list highlights the following 12 important threats:
The IRS continues to receive many email and SMS frauds targeting taxpayers and connected parties. Taxpayers and tax professionals must be watchful against fraudulent communications from groups impersonating genuine institutions in the tax and financial sectors, such as the IRS, state tax agency, and tax software businesses. These fraudsters commonly send unsolicited texts or emails that attempt to deceive unsuspecting people into providing crucial personal and financial information, perhaps leading to identity theft. There are two major categories of these scams:
Phishing:
This includes emails from scammers posing as the IRS. These emails often utilize strategies like as proposing a false tax return or threatening legal or criminal prosecution for tax fraud to lure people into the scam.
Smishing:
This applies to text or smartphone SMS messages, when fraudsters use worrisome terms like "Your account has been put on hold" or "Unusual Activity Report," followed by a phony "Solutions" link that purports to restore the recipient's account. The promise of unexpected tax returns may likewise be utilized as bait by these fraudsters.
Remember, never click on unsolicited messages purporting to be from the IRS, since they may contain malware. These acts may also allow unscrupulous hackers to spread ransomware, blocking normal users from accessing their computers and data.
The IRS provides detailed information to assist people understand and report email frauds.
In 2025, the problem of erroneous tax information on social media remains a major worry since it has the ability to deceive honest taxpayers, resulting in identity theft and tax issues. Many social media sites, including TikTok, routinely provide incorrect or misleading tax advice, with some postings even advocating the abuse of ordinary tax paperwork such as Form W-2.
The IRS warns against falling for these scams and strongly recommends people to depend on tax information from reputable sources like the IRS and experienced tax experts. The IRS also cautions taxpayers that willfully filing fake tax returns may result in severe civil and criminal consequences.
Swindlers may act as a "helpful" third party and promise to assist a taxpayer in setting up an IRS Individual Online Account at IRS.gov. In actuality, no assistance is required, and the organization provides guidance on how to join up and prevent frauds. The IRS Individual Online Account offers taxpayers vital personal tax information. However, keep in mind that third parties making these offers would attempt to steal a taxpayer's personal information and file bogus tax returns in the victim's name in order to get a large refund.
Fraudulent charities are an ongoing issue, which typically worsens during crises or natural catastrophes. These scams are put up by persons who want to take advantage of the public's benevolence. They mainly want money and personal information, which may then be utilized for identity theft and other crimes against victims.
If taxpayers opt to itemize deductions, they may be able to claim a deduction for charitable contributions on their federal tax return. However, these charitable gifts are only tax deductible if they are made to a tax-exempt organization that has been legally recognized by the IRS. The IRS and Charity Navigator websites may also be used to assess the authenticity of organizations.
Over the last year, a big problem has arisen about taxpayers who were mislead into thinking they qualified for the fuel tax credit. This credit is designed particularly for off-highway commercial and agricultural use and does not apply to the vast majority of taxpayers. Nonetheless, certain dishonest tax return preparers and marketers, especially those on social media platforms, have repeatedly encouraged people to claim the credit incorrectly in order to inflate their refunds. The IRS has seen an increase in the marketing of submitting these refundable credits using Form 4136, Credit for Federal Tax Paid on Fuels . The IRS highly recommends consumers to get thorough information to verify that they are correctly claiming this credit.
This specialty credit was made available for self-employed persons just for the tax years 2020 and 2021, which coincided with the epidemic. Please keep in mind that this credit is not valid in later tax years. The Internal Revenue Service (IRS) has observed numerous instances of taxpayers using Form 7202, designed for Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals, to incorrectly claim credits based on income earned as an employee rather than as a self-employed individual.
Misinformation about a false "Self-Employment Tax Credit" continues to circulate on social media, forcing people to file incorrect claims. Promoters erroneously portray it as a chance for self-employed persons and gig workers to get significant income during the COVID-19 epidemic period. This is similar to the misleading marketing methods linked with the Employee Retention Credit, with false statements circulating that promise broad eligibility for a tax credit and payments of up to $32,000, while in reality this is not the case.
In reality, the credit being misrepresented on social media is the more stringent and technical Credits for Sick Leave and Family Leave, not the "Self-Employment Tax Credit". Many people do not qualify for these credits, and the IRS is undertaking extensive assessments of claims filed under this provision. Taxpayers should make claims for these credits at their own risk.
Taxpayers "invent" fake home workers and then submit Schedule H (Form 1040), home Employment Taxes, to claim a refund for unpaid sick and family medical leave compensation.
A current fraudulent scam spreading on social media encourages people to file Form W-2, Wage and Tax Statement, or other forms like Form 1099-NEC and other 1099 papers using fictitious income and withholding information.
This exaggerated withholding method includes scammers urging people to fabricate large income and withholding statistics, as well as a bogus employer who provides these figures. These con artists then instruct people to electronically submit the fabricated tax return in order to get a significant refund based on the exaggerated, but fictitious, withholding amounts.
If the IRS is unable to verify the earnings, income, or withholding credits stated on the tax return, the tax refund will be held until further examination. Taxpayers should always submit a full and honest tax return, using only valid information returns, such as those supplied by an employer (e.g., Form W-2).
There are numerous variations of the overstated withholding credit scheme, including those using Forms W-2 and W-2G; Forms 1099-R, 1099-NEC, 1099-DIV, 1099-OID, and 1099-B; and those involving entities such as the Alaskan Dividend Fund, Schedule K-1 with Withholding Reported, and other unspecified sources claiming withholding credit.
The Offers in Compromise (OIC) program is an essential initiative that assists persons who are unable to pay their federal tax arrears in full. However, "mills" may aggressively sell Offers in Compromise in deceptive ways to persons who obviously do not match the standards, sometimes costing taxpayers thousands of dollars. The IRS Offer in Compromise Pre-Qualifier tool allows taxpayers to assess their eligibility for free.
Most tax preparers give excellent, professional service. However, customers should be wary of dishonest tax specialists and look for typical warning signals, such as demanding a charge depending on the amount of the return. A huge red flag or poor indicator is when the tax preparer refuses to sign the return. Avoid "ghost" preparers, who will complete a tax return but refuse to sign it or include their IRS Preparer Tax Identification Number (PTIN), as required by law. Taxpayers should never sign blank or partial returns. Instead, the IRS advises people to seek advice from a reputable tax practitioner.
In 2025, the IRS continues to monitor the recurrent "new client" fraud, which is characterized by spear phishing attempts aimed primarily at tax professionals. Cybercriminals pose as potential customers to trick tax professionals and other organizations into responding to their communications. In response, the fraudsters transmit malware attachments or URLs that attempt to infiltrate the preparer's computer systems, allowing attackers access to sensitive customer data.
This approach, known as phishing, includes sending emails or text messages designed to steal personal information from recipients, while spear phishing is a more targeted effort directed at a specific company or corporation. Tax experts are routinely targeted by such scammers. The increased danger from spear phishing stems from its ability to steal not just customer data but also the tax professional's identity, allowing for the submission of fake tax returns utilizing the stolen information.
Businesses and people, especially tax preparers, must carefully examine any suspicious requests or unusual activity before disclosing critical information or replying to communications. Poor sentence structure and unusual word choices are common warning signs. It is critical to understand that when fraudsters get access to a stolen email account, they might locate valid emails that victims had previously sent to their tax specialists.
While professional tax preparers are aware of these schemes, ghost preparers often fail to exercise similar prudence, thereby increasing the risk of data breaches and fraudulent activity.
If you have been the victim of one of these or other scams, or if your identity has been stolen, your life may become a nightmare. Identity thieves will even file tax returns using your Social Security number, claiming large refunds and leaving you with a massive headache to settle up with the IRS. Don't be a victim; call this office for help.