Summarize this content to 2000 words in 6 paragraphs The IRS has issued a new warning to Americans about the “Dirty Dozen” tax scams, an annual list of the most common and dangerous schemes that taxpayers should watch out for during tax season.Why It MattersFalling victim to a tax scam can result in serious financial losses, stolen identities, and even legal trouble. With scammers becoming more sophisticated each year, the IRS is urging taxpayers to stay vigilant and take extra precautions when filing their returns. Understanding these scams can help Americans protect their personal and financial information from fraudsters looking to exploit tax season.
A sign on the Internal Revenue Service building in seen on Thursday, February 20, 2025.
A sign on the Internal Revenue Service building in seen on Thursday, February 20, 2025.
Tom Williams/CQ Roll Call/AP
What To KnowThe IRS has released its annual Dirty Dozen list for 2025, warning taxpayers, businesses, and tax professionals about common scams that could put their financial and personal information at risk.These scams are particularly prevalent during tax season but can occur throughout the year, the IRS said.Among the most pressing concerns this year are phishing and smishing scams, where fraudsters pose as the IRS or other financial institutions through emails and text messages to steal personal information. These scams, often involving fake tax refunds or threats of legal action, may also contain malware or malicious links. The IRS urges taxpayers not to click on unsolicited emails or texts.Another growing issue is misleading tax advice circulating on social media, particularly platforms like TikTok, where scammers encourage people to misuse tax documents or claim ineligible deductions, putting them at risk for significant penalties. The IRS and CASST warn taxpayers to rely on legitimate sources, including tax professionals and official IRS communications.According to the IRS, scammers are also targeting the IRS Individual Online Account, offering third-party services to steal personal data for fraudulent tax returns. Taxpayers are advised to use official IRS channels for account management.Fake charities are another ongoing problem, especially during crises, with scammers exploiting people’s generosity, according to the IRS. Donations only qualify for tax deductions if made to IRS-recognized charities. Fraudulent claims also involve the Fuel Tax Credit, which is only available for off-highway business use, and self-employment or sick leave credits, which some fraudsters falsely promote on social media.Meanwhile, the “ghost tax return preparers” scam remains widespread, where individuals posing as professionals refuse to sign returns or provide required ID numbers. Taxpayers should avoid these preparers and seek trusted, registered professionals.Fraudsters also promote the overstated withholding scheme, encouraging taxpayers to inflate income and withholding on forms like W-2s and 1099s for larger refunds. These fraudulent claims can lead to audits and penalties.The Offers in Compromise (OIC) program, designed to help taxpayers settle debts, is also targeted by scammers who promise debt relief for an upfront fee, even for those who don’t qualify. The IRS provides a free pre-qualifier tool to help taxpayers determine eligibility.Lastly, spear phishing attacks are a concern for tax professionals, as scammers impersonate clients to gain access to sensitive information and file fraudulent returns. Tax preparers should be cautious of suspicious emails and links that may compromise their data.The IRS urges taxpayers to be cautious, verify tax information through legitimate sources, and avoid falling victim to misleading or deceptive claims. The agency also emphasized that it will continue to work with law enforcement and financial institutions to track down and prosecute scammers.The Dirty Dozen campaign was first launched by the IRS in 2002 under Commissioner Lemons’ leadership to fight rising cases of fraud, especially tax-related identity theft. The effort is part of the ongoing collaboration between the IRS, state tax agencies, tax software companies, and financial institutions through the Security Summit to prevent refund fraud and protect taxpayers. In 2024, a new initiative called the Coalition Against Scam and Scheme Threats (CASST) was launched to address the rising threat of scams fueled by social media platforms like TikTok, where incorrect tax advice is circulating rapidly.What People Are SayingTerry Lemons, IRS communications senior adviser, said in a press release: “Scammers are relentless, and they use the guise of tax season to try tricking taxpayers into falling into a variety of traps. These red flags can lead to everything from identity theft to being misled into claiming tax credits for which they’re not entitled. For more than two decades, the IRS has highlighted the Dirty Dozen through far-reaching communications and education campaigns as part of a wider effort by the agency to protect taxpayers from being scammed.”What Happens NextAnyone who suspects they are a victim of fraud is urged to report it immediately to the IRS.
