Dirty dozen tax scams for 2025

Dirty Dozen Tax Scams For 2025

March 7, 2025

The IRS's annual "Dirty Dozen" memo lists 12 scams you should watch out for. The education effort wants to protect you from tax traps like identity theft or being misled into claiming tax credits you're not entitled to.

Let's look at these threats, often fueled by social media:

Email phishing scams

Email and text scams target taxpayers. Look for fake communications from entities posing as legitimate firms in the tax and financial community, including the IRS, state tax agencies and tax software companies. Messages lure victims into providing valuable personal and financial information that can lead to identity theft. A text message may come with words like "Your account has now been put on hold" or "Unusual Activity Report" and a bogus "solutions link" to restore your account. Never click on any unsolicited communication claiming to be from the IRS, which can load malware or ransomware and keep you from accessing your system.

Bad social media advice

Incorrect tax information on social media can mislead you, with people sharing inaccurate tax advice like misusing Form W-2. Instead, follow trusted social media advice from the IRS, tax professionals and other reputable sources.

Online help from scammers

Swindlers can pose as a helpful third party, offering to create an IRS Individual Online Account at IRS.gov. You don't need help to do so—the IRS offers tips on how to sign up and avoid scams. Third parties may try to steal your personal information by submitting tax returns in your name to get a big refund.

Fake charities

Scammers set up fake organizations to take advantage of your generosity after a natural disaster strikes, seeking money and personal information that can be used to exploit you through identity theft. Charitable donations only count if they go through a qualified tax-exempt organization recognized by the IRS.

False Fuel Tax Credit claims

Taxpayers have been misled into believing they're eligible for the Fuel Tax Credit, meant for off-highway business and farming use. Unscrupulous tax return preparers entice you into inflating your refunds by erroneously claiming the credit. Work with legitimate preparers to make sure you're only claiming credits and deductions you're entitled to.

Credits for sick and family leave

A specialized credit for self-employed individuals for 2020 and 2021 during the pandemic and not available for later tax years. You may be incorrectly claiming credits based on income earned as an employee, not a self-employed individual.

Bogus self-employment tax credit

Social media advice is circulating about a non-existent self-employment tax credit, misleading taxpayers into filing false claims. Inaccurate information suggests you could qualify for payments up to $32,000 when this simply isn't so.

Improper household employment taxes

Taxpayers invent fictional household employees to claim a refund based on false sick and family leave wages never paid.

The overstated withholding scam

You're being encouraged to fill out Form W-2 or 1099 with false income and withholding information. Scam artists suggest filing the bogus tax return electronically to get a substantial refund due to the large fraudulent withholding. Other versions of this same scam include filing for the Alaskan Dividend Fund or any unspecified withholding credit.

Misleading Offers in Compromise

The OIC program helps people settle their federal tax debts when they're unable to pay in full. Tax mills aggressively promote OIC even if you don't meet the qualifications.

Ghost tax return preparers

Shady tax pros charge a fee based on the size of your refund. A major red flag is if the tax preparer won't sign your return. Never sign a blank or incomplete return—turn instead to a trusted preparer.

New client scams and spear phishing

The new-client scam targets businesses. Cybercriminals impersonate potential clients to trick businesses to respond to their emails. The scammer sends a malicious attachment or URL to compromise the owner's computer, allowing the attacker to access sensitive client information. This is known as spear phishing because it's tailored to a specific business.

Warning signs of suspicious requests include poorly constructed sentences and unusual word choices. Beyond these scams, there are a wide array of other abusive schemes and bogus tax avoidance strategies that you can peruse at the Dirty Dozen section on IRS.gov. This is just a summary. For further guidance, please reach out to your Larson & Company tax advisor.