‘Dirty Dozen’: IRS highlights common tax scams

March 27, 2025

Scammers often ramp up their efforts during tax season, preying on people looking for an extra boost in their refund or those following false social media fads.

The IRS recently released its annual “Dirty Dozen” tax scams. The list features increasingly common and creative ways that fraudsters seek to steal money, personal information or data.

The professionals at Honkamp can help you identify and avoid the “too good to be true” options. Connect with us to receive financial peace of mind and legitimate ways to boost your business.

Below are brief summaries of the “Dirty Dozen” provided by the IRS. (You can find more in-depth explanations from the agency here.)

1. Phishing and smishing: Scammers pose as “legitimate organizations in the tax and financial community,” including the IRS, tax software companies and specific states. They then use unsolicited emails (phishing) or texts (smishing) to get victims to hand over financial info. A reminder: Never click on any unsolicited communication claiming to be from the IRS.
2. Social media “experts”: Incorrect tax information on social media is prevalent, misleading taxpayers and potentially leading to identity theft and tax issues. For example, videos on TikTok often circulate inaccurate tax advice, including the misuse of tax documents such as your W-2. Only follow advice from trusted sources, or risk facing penalties for filing fraudulent tax returns.
3.  Online account “help”: Scammers will reach out to offer to help create an online account at IRS.gov for an individual or business. Again, this is just a way to steal your information, so they can file a fraudulent tax return to try to get a big refund. Anyone can set up their own account at IRS.gov – no “help” needed.
4.  Fake charities: Fake charities continue to be a persistent problem, particularly online in the wake of natural disasters or other crises. In addition to stealing your donations, fake charities can help criminals obtain your financial information.
5.  False fuel tax credit claims: The IRS cited this as “a major concern during the past year.” The fuel tax credit is legitimate, but it’s meant for off-highway business and farming use, so it is not available for most taxpayers. But that hasn’t stopped “unscrupulous tax return preparers and promoters” from pushing people to claim it.
6.  Credits for sick and family leave: The Credits for Sick Leave and Family Leave were available for self-employed individuals for 2020 and 2021 during the pandemic, but not for later tax years. The IRS has noticed taxpayers incorrectly claiming this credit based on employee income instead of self-employed income.
7.  Fake Self-Employment Tax Credit: Social media is spreading lies about a non-existent "Self-Employment Tax Credit," misleading taxpayers into filing false claims for large payments. The actual credit being referred to is the Credits for Sick Leave and Family Leave, for which many people do not qualify. The IRS is closely reviewing these claims, and taxpayers filing them do so at their own risk.
8.  Invented employees: In this scenario, taxpayers “invent” fictional household employees, then try to claim a refund based on sick and family medical leave wages they never paid.
9.  The “overstated withholding scam”: The IRS reports that this newer scheme making the rounds on social media encourages people to make up large income and withholding amounts as well as the fictional employer supplying those amounts. Scammers then instruct people to file the bogus tax return electronically in hopes of getting a substantial refund due to the large amount of fraudulent withholding.
10.  Misleading “offers in compromise”: The IRS’s Offers in Compromise program helps people settle federal tax debts when they can’t pay in full. But some unsavory advisors aggressively push the program to people who don’t meet the qualifications, “frequently costing taxpayers thousands of dollars.” You can check your eligibility for free here: Offer in Compromise Pre-Qualifier tool
11.  Ghost tax return preparers: Be careful of “shady tax professionals” and watch for warning signs such as charging a fee based on the size of the refund. A major red flag is when the tax preparer is unwilling to sign the return or include their IRS Preparer Tax Identification Number as required by law. You should never sign a blank or incomplete return.
12.  New client scams and “spear phishing”: The IRS continues to see cybercriminals impersonate new, potential clients to trick tax professionals and other businesses into responding to their emails. Once the recipient responds, the scammer sends a malicious attachment or URL that can compromise the recipient's computer systems and allow the attacker to access sensitive client information.

As always, if you have tax questions, reach out to your Honkamp advisor and stay out of hot water with the IRS.