While layoffs and economic uncertainty make headlines, one thing remains constant every year—tax scams.
The IRS warns that fraudsters are always active, but they ramp up their schemes during tax season. From fake refunds to misleading tax credits, scams take many forms and put taxpayers at risk of identity theft and financial loss.
“Scammers are relentless, and they use the guise of tax season to try to trick taxpayers into falling into a variety of traps,” said IRS senior adviser Terry Lemons. “These red flags can lead to everything from identity theft to being misled into claiming tax credits for which they’re not entitled.”
Here’s a look at this year’s IRS “Dirty Dozen” list of tax scams to avoid.
1. Fake emails and texts
One of the most common scams involves fake emails and text messages that pretend to be from the IRS, state tax agencies, or tax software companies.
Phishing emails often promise a fake refund or threaten legal action for tax fraud. Scam text messages—also called “smishing” scams—contain urgent warnings like “Your account is on hold” or “Unusual activity detected.” These messages include links that steal personal information.
2. Social Media Misinformation
Social media can be great for staying connected, but it’s a terrible place for tax advice.
The IRS has flagged platforms like TikTok, where inaccurate tax advice is spreading rapidly. Some posts encourage people to misuse tax forms like W-2s, leading to legal trouble and potential identity theft.
3. Fraudulent online account setup
Taxpayers do not need third-party help to create an IRS Individual Online Account, but scammers pretend to assist with setup.
These fraudsters collect personal details and use them to file fake tax returns in the victim’s name.
4. Fake charities
Every year, scammers create bogus charities to trick people into donating money or providing personal information.
Taxpayers should confirm that a charity is registered with the IRS before making any donations. Only contributions to qualified organizations are tax-deductible.
5. False Fuel Tax Credit Claims
The Fuel Tax Credit is meant for businesses using off-highway vehicles, like farm equipment, but scammers mislead taxpayers into claiming it.
Dishonest taxpayers encourage individuals to fraudulently claim this credit to inflate their refunds.
The credits for sick leave and family leave were only available for self-employed individuals in 2020 and 2021.
6. Improper sick and family leave credits
However, scammers promote Form 7202 to claim this credit for recent tax years improperly. This can lead to penalties and audits.
7. Fake self-employment Tax Credit
Some social media influencers push a nonexistent “Self-Employment Tax Credit,” claiming it offers payments up to $32,000.
This misinformation is often confused with the legitimate but limited credits for sick leave and family leave. Falling for this scam could result in IRS penalties.
8. Fake household employees
A growing scam involves taxpayers inventing fake household employees and filing a Schedule H.
By doing so, they claim refunds for sick and family leave wages that were never actually paid.
9. Falsifying income on tax forms
A dangerous scheme circulating online encourages people to fabricate income and tax withholdings.
Scammers advise filing fake W-2s, 1099s, and other forms to claim large refunds. The IRS aggressively pursues those who participate in this fraud.
10. Bogus “offers in compromise”
Some companies falsely advertise that they can settle tax debt for pennies on the dollar through an Offer in Compromise (OIC).
These misleading services charge hefty fees but provide no real benefit. The IRS offers OIC applications for free, and only qualified individuals can receive relief.
11. Ghost tax preparers
Dishonest tax preparers continue to operate under the radar.
They often charge fees based on refund size, refuse to sign tax returns, or fail to provide a Preparer Tax Identification Number (PTIN). These are major red flags.
12. The “New Client” scam
Cybercriminals posing as potential clients target tax professionals and businesses.
They send emails requesting tax help and then attach malicious files or links. Once opened, these can compromise sensitive client data.
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How to protect yourself
Taxpayers should stay vigilant and verify any suspicious communications claiming to be from the IRS.
The IRS does not initiate contact through email, text, or social media. If in doubt, visit the official IRS website or call their direct phone number to confirm any requests.
By recognizing these scams and staying informed, taxpayers can protect themselves from fraud this tax season.
