Tax season brings the annual rush to file returns, claim refunds, and maximize deductions. Unfortunately, it also brings a surge in tax scams targeting individuals, businesses, and tax professionals. To help taxpayers stay informed, the IRS has released its annual “Dirty Dozen” list, highlighting the most prevalent tax scams of 2025.
These scams range from phishing emails to fraudulent tax credits and identity theft, causing significant financial and legal troubles for unsuspecting victims. While tax scams peak during the filing season, they remain a year-round threat. This guide will help you recognize and protect yourself from these schemes.
1. Email Phishing and Smishing Scams
Cybercriminals are refining their tactics with sophisticated phishing (email-based) and smishing (text message-based) scams. Fraudsters pose as the IRS, state tax agencies, or tax software companies to trick taxpayers into revealing sensitive financial information.
- Phishing emails often claim you’re due for a tax refund or threaten penalties to create a sense of urgency.
- Smishing texts contain fraudulent links claiming your tax account has issues or that you need to claim a refund immediately.
How to Stay Safe: The IRS does not send unsolicited emails or text messages. Never click on links or open attachments from unknown sources.
2. Fake Tax Preparers (Ghost Preparers)
Most tax professionals operate ethically, but beware of “ghost” tax preparers who refuse to sign returns. These scammers promise large refunds, charge fees based on refund size, and often file fraudulent returns using stolen information.
How to Stay Safe: Always use a legitimate tax professional with an IRS Preparer Tax Identification Number (PTIN). Review your return before submission and never sign a blank tax form.
3. Social Media Tax Myths
False tax advice spreads rapidly on social media platforms like TikTok and Facebook. Inaccurate guidance on how to claim nonexistent deductions, manipulate tax documents, or inflate refunds has led to serious legal consequences for taxpayers.
How to Stay Safe: Trust only reputable sources such as the IRS, professional tax preparers, or certified public accountants (CPAs).
4. IRS Online Account Scams
Scammers pose as helpful third parties, offering to set up an IRS online account for taxpayers. Instead, they steal personal data to commit identity theft and fraudulently file returns.
How to Stay Safe: Set up your IRS account independently at IRS.gov. Do not share login credentials or personal information with unauthorized individuals.
5. Fake Charities
Fraudsters exploit goodwill by setting up fake charities, especially after disasters. These scams trick taxpayers into donating money or revealing personal information.
How to Stay Safe: Verify charities through the IRS Tax Exempt Organization Search tool. Avoid making donations via unsolicited calls or emails.
6. False Fuel Tax Credit Claims
Promoters falsely encourage taxpayers to claim the Fuel Tax Credit, which applies only to off-highway business use, such as farming. Many taxpayers who wrongfully claim this credit face audits and penalties.
How to Stay Safe: Ensure eligibility before claiming specialized credits. Seek advice from a tax professional.
7. Misuse of Sick and Family Leave Credits
The IRS has identified fraudulent claims for pandemic-related sick and family leave credits using Form 7202. These credits were available only for 2020 and 2021.
How to Stay Safe: Do not file for expired or inapplicable tax credits. Misinformation on social media often fuels these scams.
8. Fraudulent Self-Employment Tax Credit Claims
A nonexistent “Self-Employment Tax Credit” is being promoted online, misleading gig workers into filing false claims.
How to Stay Safe: Research any credit before claiming it. The IRS does not offer a general self-employment tax credit.
9. Household Employment Tax Fraud
Some taxpayers fabricate household employees on their tax returns to claim fraudulent refunds. The IRS has increased scrutiny of such claims.
How to Stay Safe: Only report legitimate wages paid to household employees and follow proper tax-filing procedures.
10. Overstated Withholding and W-2 Fraud
Scammers encourage taxpayers to falsify income and withholding amounts on Form W-2 to generate large, unjustified refunds. The IRS rejects such returns and may impose fines or criminal penalties.
How to Stay Safe: Report only accurate income and withholding as provided by your employer.
11. Misleading Offers in Compromise (OIC) “Mills”
Some companies falsely claim they can help taxpayers settle IRS debts for pennies on the dollar through the Offer in Compromise program. These operations often charge high fees and mislead taxpayers about their eligibility.
How to Stay Safe: Use the IRS’s free Offer in Compromise Pre-Qualifier Tool to determine eligibility before paying for assistance.
12. New Client Phishing Scams Targeting Tax Professionals
Cybercriminals pose as potential clients, sending phishing emails with malicious attachments to tax professionals. If opened, these attachments install malware that steals taxpayer data.
How to Stay Safe: Tax professionals should verify client inquiries before sharing sensitive data and use strong cybersecurity measures.
Final Thoughts: Protect Yourself from Tax Scams
Falling victim to tax fraud can lead to identity theft, legal trouble, and financial loss. Here are key ways to protect yourself:
- Verify IRS communications through IRS.gov.
- Use strong passwords and multi-factor authentication for online tax accounts.
- Monitor your tax records for unexpected filings or suspicious activity.
- File taxes early to prevent fraudsters from filing in your name.
- Report scams to the IRS via [email protected] or the Treasury Inspector General for Tax Administration (TIGTA).
If you suspect tax fraud or need help navigating tax complexities, contact our office for expert assistance. Stay informed and protect your financial future!
