Tax scams continue to evolve every year, putting individuals, businesses, and tax professionals at risk of financial loss and identity theft. To help taxpayers stay vigilant, the Internal Revenue Service (IRS) releases its annual Dirty Dozen list, highlighting the most common tax scams and fraudulent schemes. While these scams often become more active during tax season, they can occur throughout the year.

What Are the IRS Dirty Dozen Tax Scams?

The IRS Dirty Dozen is an annual awareness campaign that identifies the most prevalent tax scams targeting taxpayers, businesses, and tax professionals. These scams range from phishing emails and fake charities to abusive tax shelters and identity theft.

The purpose of the list is educational—it helps taxpayers recognize warning signs and avoid becoming victims. While the scams on the list may change slightly each year, the underlying tactics remain similar: criminals attempt to steal money, personal information, or tax refunds through deception.

Common IRS Dirty Dozen Tax Scams

1. Phishing and Smishing Attacks

Cybercriminals frequently send fraudulent emails (phishing) or text messages (smishing) pretending to be from the IRS. These messages often claim there's an urgent issue with your tax return, refund, or account and ask you to click a link or provide sensitive information.

The IRS generally does not initiate contact through email, text messages, or social media to request personal or financial information.

2. Fake IRS Phone Calls

Scammers may call taxpayers pretending to be IRS employees. They often use aggressive language, threaten arrest, deportation, or legal action, and demand immediate payment using gift cards, wire transfers, or cryptocurrency.

Remember that legitimate IRS representatives provide written notices before making phone calls about unpaid taxes.

3. Identity Theft

Identity thieves use stolen Social Security numbers and personal information to file fraudulent tax returns and claim refunds before the legitimate taxpayer files.

Signs of tax-related identity theft include receiving an IRS notice about multiple tax returns filed under your Social Security number or being unable to e-file because a return has already been submitted.

4. Fake Charities

Natural disasters and humanitarian crises often lead to an increase in fake charities. Fraudsters create organizations that closely resemble legitimate nonprofits and solicit donations while stealing both money and personal information.

Always verify a charity before making a donation.

5. Social Media Tax Advice

Misleading tax tips spread quickly across social media platforms. Some posts encourage taxpayers to claim credits they don't qualify for or submit false information to obtain larger refunds.

Following inaccurate tax advice can result in penalties, audits, and delayed refunds.

6. Unscrupulous Tax Preparers

While most tax professionals are trustworthy, some preparers manipulate tax returns to inflate refunds or charge excessive fees. Others may disappear after filing fraudulent returns, leaving taxpayers responsible for errors.

Choose a qualified tax professional with a valid Preparer Tax Identification Number (PTIN).

7. Offer in Compromise Mills

Some companies falsely advertise that they can settle tax debt for "pennies on the dollar" regardless of your financial situation. Many taxpayers pay high fees only to discover they do not qualify for an IRS Offer in Compromise.

Always verify eligibility before paying for tax resolution services.

8. False Fuel Tax Credit Claims

The Fuel Tax Credit is intended for specific business and farming activities. Scammers encourage ineligible taxpayers to claim this credit to increase refunds.

Improper claims may trigger IRS audits and repayment obligations.

9. Improper Employee Retention Credit Claims

Some promoters aggressively market Employee Retention Credit (ERC) claims to businesses that do not qualify. They often charge large contingency fees and submit inaccurate claims.

Businesses should carefully review eligibility requirements before applying.

10. Abusive Tax Schemes

Certain promoters market abusive tax shelters or offshore arrangements designed to illegally reduce tax liability. These schemes often promise substantial tax savings without legitimate legal support.

Participating in abusive tax schemes can lead to significant penalties and legal consequences.

11. Digital Asset Reporting Scams

As cryptocurrency ownership grows, scammers increasingly target investors with fake tax reporting services or fraudulent investment schemes. They may ask for wallet credentials or promote false tax deductions related to digital assets.

Always work with qualified tax professionals familiar with cryptocurrency reporting requirements.

12. Fraudulent Refund Claims

Some scammers encourage taxpayers to submit false wage information, inflated withholding amounts, or fabricated deductions to receive larger refunds.

Submitting inaccurate tax information—even unintentionally—can result in penalties, interest, and criminal investigations.

Warning Signs of Tax Scams

Many IRS Dirty Dozen scams share common characteristics. Be cautious if someone:

• Demands immediate payment.
• Threatens arrest or legal action.
• Requests payment through gift cards or cryptocurrency.
• Asks for personal information via email or text.
• Promises unusually large tax refunds.
• Guarantees eligibility for tax credits without reviewing your financial records.
• Refuses to provide professional credentials.

If something sounds too good to be true, it probably is.

How to Protect Yourself

Taking proactive steps can significantly reduce your risk of becoming a victim.

Protect your personal information. Never share your Social Security number, IRS account information, or banking details unless you're certain the request is legitimate.

Use strong cybersecurity practices. Enable multi-factor authentication, use strong passwords, and keep your devices updated.

Choose a reputable tax preparer. Verify credentials, review client feedback, and ensure the preparer signs your tax return.

File your tax return early. Filing before identity thieves can submit a fraudulent return reduces your risk of tax-related identity theft.

Verify IRS communications. If you receive an unexpected email, text, or phone call claiming to be from the IRS, verify its authenticity before responding.

Monitor your financial accounts. Regularly review bank accounts, credit reports, and IRS notices for unusual activity.

What to Do If You Become a Victim

If you suspect you've encountered an IRS Dirty Dozen scam:

• Stop communicating with the scammer immediately.
• Do not click suspicious links or download attachments.
• Report phishing emails and text messages to the IRS.
• Contact your financial institution if you've shared banking information.
• File an identity theft report if your personal information has been compromised.
• Notify the IRS if you believe a fraudulent tax return has been filed using your identity.
• Consider placing a fraud alert or credit freeze with major credit bureaus.

Acting quickly can minimize financial damage and simplify the recovery process.

Final Thoughts

The IRS Dirty Dozen tax scams serve as an important reminder that tax fraud is constantly evolving. Criminals continue to develop sophisticated tactics to steal refunds, personal information, and financial data. By understanding these common scams, recognizing warning signs, and practicing good cybersecurity habits, taxpayers can significantly reduce their risk.

Whether you're filing as an individual, managing a business, or working with a tax professional, staying informed is your best defense against tax fraud. Before responding to any unexpected tax-related communication or making decisions based on online advice, verify the information through official IRS resources or consult a qualified tax professional. A little caution today can help protect your finances and personal information throughout the year.