Every year, the IRS issues its “Dirty Dozen” list, highlighting the most prevalent and dangerous tax scams. The 2025 edition is no exception, with a mix of old and new scams targeting unsuspecting taxpayers. These schemes can result in significant financial losses, identity theft, and even criminal charges if the taxpayer becomes involved. Optima Tax Relief reviews the IRS Dirty Dozen Tax Scam List for 2025, along with tips on how to protect yourself.
Phishing Scams
Phishing scams continue to be one of the most common tactics used by fraudsters. These scams often involve fraudulent emails, text messages, or phone calls that appear to come from the IRS or other legitimate organizations. The goal is to trick taxpayers into revealing sensitive information, such as Social Security numbers, bank account details, or passwords. The IRS reminds taxpayers that it will never initiate contact via email, text, or social media to ask for sensitive information. If you receive a suspicious message claiming to be from the IRS, do not click on any links or attachments. Instead, report it to the IRS and delete the message.
Fake Charities
Fraudsters often take advantage of taxpayers' generosity by setting up fake charity websites and solicitations. These scams are particularly rampant during tax season, as fraudsters promise significant deductions for charitable donations. However, these fake charities do not actually exist, and any “donations” made are lost to the scammer. The IRS urges taxpayers to verify any charity before making donations. The IRS Tax Exempt Organization Search tool can help you check if an organization is eligible to receive tax-deductible donations. If the charity is not listed, donations made to it may not be deductible.
Social Media Tax Scams
Scammers are increasingly using social media platforms to offer bad tax advice or promote fraudulent schemes. These scams may involve fake tax “experts” offering misleading tips or making claims about tax breaks that don't exist. Taxpayers should be cautious of any advice shared on social media, particularly when it encourages them to take shortcuts or avoid paying taxes. Always consult a legitimate tax professional or the IRS directly for accurate guidance.
Fraudulent IRS Individual Account Help
Fraudsters often impersonate IRS agents or claim to offer assistance with IRS online account setup or tax filings. These scammers may ask for personal information, such as your taxpayer ID or login credentials for the IRS online portal, with the intention of stealing your identity or accessing your accounts. The IRS urges taxpayers to only use official IRS channels to create and manage their online accounts. If you receive unsolicited offers of help, especially from unknown sources, avoid providing any personal information.
False Fuel Tax Credit Claims
Some businesses are targeted by scammers promising large refunds through fuel tax credits. These scams involve fraudulent claims related to the fuel excise tax, where fraudsters submit false or inflated claims for credits. If you are a business owner, be careful of any third party promising large refunds for fuel tax credits without adequate documentation. The IRS will thoroughly review any such claims, and submitting false information could result in penalties.
Credits for Sick Leave and Family Leave
During the COVID-19 pandemic, the IRS provided tax credits for sick leave and family leave under the Families First Coronavirus Response Act (FFCRA). Unfortunately, fraudsters have attempted to exploit these credits by submitting false claims on behalf of businesses. The IRS stresses that only qualified businesses are eligible for these credits, and claims should be backed by accurate records. If you’re unsure whether your business qualifies, consult with a tax professional before submitting any claims.
Bogus Self-Employment Tax Credit
The IRS has also warned about scams related to the self-employment tax credit, which fraudsters may offer to individuals and businesses in exchange for a fee. These scams often involve fraudulent filings of the credit for individuals who do not meet the necessary criteria. Self-employed individuals should be cautious of any services claiming to offer this credit without verifying eligibility. To avoid penalties, only claim the self-employment tax credit if you meet all the IRS requirements.
Improper Household Employment Taxes
Some taxpayers may be unaware of the need to pay employment taxes for household workers, such as nannies or housekeepers. Scammers have exploited this ignorance by promising to help individuals reduce or avoid these taxes in exchange for fees. The IRS reminds taxpayers that all household employees must be reported, and appropriate taxes must be paid. If you hire a household worker, consult with a tax professional to ensure compliance.
Overstated Withholding Scam
In this scam, fraudsters convince taxpayers to falsely inflate their withholding allowances to reduce their withholding amounts. This tactic can result in significant underpayment of taxes, leading to penalties and interest when the taxpayer files their return. The IRS warns against adjusting withholding allowances based on fraudulent advice. Taxpayers should ensure their withholding is accurate to avoid owing money when it’s time to file their taxes.
Misleading Offers in Compromise
Scammers often prey on individuals struggling with tax debt by offering to settle the debt for a fraction of what is owed through an Offer in Compromise. However, these fraudsters charge large upfront fees and make promises they can’t keep. If you are struggling with tax debt, the IRS offers an Offer in Compromise program, but taxpayers should approach only legitimate and authorized tax professionals for assistance. Avoid any company that requires upfront payments before evaluating your case.
New Client Scams
Scammers often target new clients by offering seemingly legitimate services and posing as reputable tax preparers or tax relief companies. Once the scammer has the client's personal information or payment, they disappear, leaving the taxpayer with no recourse. To avoid these scams, always check reviews, verify credentials, and ensure any tax service provider is reputable before sharing personal information.
Conclusion
The 2025 IRS Dirty Dozen highlights a wide range of tax scams that can affect taxpayers, from phishing and identity theft to fraudulent credits and misrepresented tax services. Staying vigilant and educating yourself on the risks is essential to protecting your financial security. Always rely on official IRS communications, verify any tax advice you receive, and report suspicious activity to the IRS. By taking these steps, taxpayers can help avoid falling victim to these dangerous scams.
