Every tax season, scammers ramp up their efforts to steal personal and financial information from taxpayers, businesses, and tax professionals. To combat these fraudulent activities, the IRS has released its Dirty Dozen list for 2025, highlighting the most common tax scams. These scams range from phishing emails to misleading tax credit claims, and tax professionals should stay aware and avoid falling victim.

The 2025 IRS Dirty Dozen Tax Scams

Here are the 12 most common tax scams taxpayers should watch out for in 2025:

1. Email Phishing and Smishing Scams

Scammers send fraudulent tax emails (phishing) or text messages (smishing) claiming to be from the IRS, state tax agencies, or financial institutions. These messages often promise refunds or threaten penalties to trick taxpayers into revealing personal information.

Avoid this scam by avoiding and encouraging clients to avoid clicking on unsolicited emails or texts claiming to be from the IRS.

 

2. Bad Social Media Tax Advice

Tax misinformation on social media is on the rise. Scammers promote false claims about tax credits and deductions, encouraging people to file fraudulent returns.

Prevent this scam by encouraging your clients to trust only verified sources like the IRS or licensed tax professionals, like you.

3. IRS Online Account Assistance Scams

Fraudsters pose as third parties offering to set up an IRS Individual Online Account. Their goal is to steal personal information and file fraudulent tax returns in victims’ names.

Clients can avoid this scam by only setting up IRS Individual Online Accounts through the official IRS website and to report any unsolicited assistance offers to phishing@irs.gov.

4. Fake Charities

Scammers exploit people’s generosity by creating fake charities, especially after disasters or crises.

Avoid this scam by encouraging clients to always verify a charity’s tax-exempt status before donating by using the IRS Tax-Exempt Organization Search Tool.

5. False Fuel Tax Credit Claims

The Fuel Tax Credit applies only to off-highway business and farming use, yet scammers entice taxpayers to falsely claim it on their returns. Filing an ineligible claim could lead to audits and penalties.

Prevent this scam by helping clients understand the specific qualifications for the Fuel Tax Credit and thoroughly document all claims to avoid unjustified credits and IRS penalties

6. Credits for Sick Leave and Family Leave Fraud

The Sick Leave and Family Leave Credit was available only for self-employed individuals during 2020 and 2021. Fraudsters encourage taxpayers to incorrectly claim the credit in 2025, leading to tax issues.

Help clients avoid this scam by letting them know that the Sick and Family Leave Credits were specific to 2020 and 2021, and eligibility varies for any similar claims before filing.

7. Bogus Self-Employment Tax Credit

Scammers mislead self-employed individuals into claiming a nonexistent Self-Employment Tax Credit to get large refunds. The IRS is cracking down on these fraudulent claims.

Avoid this scam by educating clients on legitimate self-employment tax credits and verify all claims against current IRS guidelines to prevent fraudulent claims.

8. Improper Household Employment Taxes

Fraudsters invent fake household employees and file Schedule H to falsely claim sick and family medical leave wages that were never paid.

Avoid this scam by requiring proof of payment and employment details for any household employee before filing Schedule H to avoid fictitious wage claims.

9. Overstated Withholding Scam

Taxpayers are encouraged to file fake Forms W-2 or 1099 with exaggerated income and withholding amounts to secure large refunds. The IRS flags and holds these fraudulent returns for review.

Prevent this scam by doublechecking the authenticity of all Forms W-2 and 1099 and confirm the accuracy of reported income and withholdings with clients.

10. Misleading Offers in Compromise (OIC) Mills

Some firms aggressively market Offers in Compromise (OIC) to taxpayers who don’t qualify, charging high fees for false promises. Taxpayers can check their eligibility for free using the IRS OIC Pre-Qualifier Tool.

Avoid this scam by recommending OIC if clients clearly meet the IRS criteria and utilize the IRS OIC Pre-Qualifier tool to verify eligibility before proceeding.

11. Ghost Tax Return Preparers

Unscrupulous tax preparers file returns but refuse to sign them, leaving taxpayers vulnerable to errors, audits, or fraud. Always use a legitimate, IRS-registered tax preparer.

Prevent this scam by making sure all tax returns are signed by the correct parties and confirm their credentials to maintain accountability and avoid ghost preparer fraud.

12. New Client Spear Phishing Scams

Cybercriminals pose as potential clients targeting tax professionals. These scammers send malicious links or attachments that compromise tax preparers’ systems and steal sensitive client data.

Avoid this scam by educating staff on cybersecurity best practices, including verifying new client identities and avoiding suspicious emails to protect against phishing attacks.

How to Protect Yourself and Clients from Tax Scams

To stay safe from these scams, practice the following best practices:

  • Verify IRS Communications: The IRS never initiates contact via email, text, or social media. Official IRS communications are sent through the U.S. Postal Service.
  • Use Strong Cybersecurity Practices: Be cautious when sharing personal information online and use strong passwords for financial accounts.
  • File Taxes Early: Filing early can prevent scammers from fraudulently using your information to claim a refund.
  • Choose a Trusted Tax Professional: Check your tax preparer’s credentials using the IRS Directory of Federal Tax Return Preparers.
  • Report Suspicious Activity: Suspected scams can be reported using IRS Form 14242.

 

The IRS Dirty Dozen list for 2025 serves as a crucial reminder for taxpayers and tax professionals to stay alert against scams. Awareness and caution are key to safeguarding financial and personal information from fraudsters. By following IRS guidance and seeking professional tax advice, taxpayers can ensure a smooth and secure filing season.

For more details on tax scams and fraud prevention, visit the IRS Dirty Dozen page.

For professional tax software and fraud prevention tips, explore the TaxAct Professional blog.

 

Disclaimer: This article is for informational purposes only and not legal or financial advice.