Keep Your Nose Clean: Avoiding the IRS’s “Dirty Dozen” in 2025

New Year’s resolutions bring about commitments to avoid many things including stress, smoking, bad diets, and overspending. The IRS is adding to taxpayers’ ‘things to avoid’ by publishing their annual “Dirty Dozen” list for 2025. Released on February 27, 2025, the Dirty Dozen is the IRS’ list of tax scams that taxpayers and tax preparers should be on the lookout for in 2025. Often, these scams peak during the tax filing season in March and early April. The Dirty Dozen for 2025 include the following: 

1. Email Phishing/Smishing Scams 
   Scammers will pose as employees of the IRS, state tax agencies, and tax software companies. In phishing scams, victims are lured by threats of criminal charges or enticements of tax refunds to provide their personal information. Through smishing scams, victims receive a text to their cellphones alerting them to unusual activity or a hold on their account that can only be resolved by providing personal information.  
   
   
2. Bad Social Media Advice
   Many people spend a considerable amount of time scrolling through social media. Various social media platforms and influencers provide egregiously incorrect tax advice. For instance, in a common scheme currently circulating social media, taxpayers are encouraged to fill out Forms W2 with bogus information including extremely high withholding. Scammers encourage taxpayers to file tax returns with the fake W2s in an effort to secure large refunds based on the reported withholding. 
   
   
3. IRS Individual Online Account Help 
   The IRS offers taxpayers the ability to create an Individual Online account at irs.gov to access personal tax records, make and view payments, and set up payment plans. These accounts are easily navigable. Scammers posing as helpful third parties encourage taxpayers to engage them for assistance in setting up their individual online accounts. By doing so, the scammers gain access to taxpayers’ personal tax information. 
   
   
4. Fake Charities
   Scammers create fake charities during times of humanitarian crises and natural disasters. Scammers solicit “tax-deductible” donations from well-meaning taxpayers. However, these funds often never reach the people they are purportedly helping. Additionally, as they are not qualified tax-exempt organizations, taxpayers are not actually entitled to a tax donation.
   
   
5. False Fuel Tax Credit Claims 
   A Fuel Tax Credit is offered to a small subset of taxpayers who purchase fuel for machinery involved in off-highway business and farming. Promoters have been enticing the general public to file tax returns inflating their refunds by erroneously claiming this tax credit.
   
   
6. Credits for Sick Leave and Family Leave
   Certain self-employed individuals were entitled to receive this credit during 2020 and 2021. The IRS has seen an uptick in employees (not self-employed) erroneously claiming the credit or self-employed individuals claiming the credit in later years, when it was not available.
   
   
7. Bogus Self-Employment Tax Credit
   While there is no such thing as a “self-employment tax credit,” promoters mislead self-employed and gig workers into claiming a tax credit related to activity during the COVID-19 pandemic period.
   
   
8. Improper Household Employment Taxes
   Promoters encourage taxpayers who did not have household employees to prepare a Schedule H reporting fictional wages paid to fictional employees. The Schedules H will then be used to claim a refund based on sick and family medical leave wages that were never actually paid.
   
   
9. Overstated Withholding Scam 
   Promoters encourage taxpayers to complete fraudulent Forms W-2 and Forms 1099, thus reporting false income and withholding information. Taxpayers are then encouraged to file false tax returns seeking large refunds based on fraudulently reported withholding.
   
   
10. Misleading Offers in Compromise.
    Certain qualifying taxpayers may settle their federal tax debt for a lower amount than they owe through an Offer in Compromise (“OIC”) when they are unable to fully pay.  OIC “mills” aggressively promote OICs to taxpayers who do not qualify while charging a significant fee for their service in trying to settle the tax debt.
    
    
11. “Ghost” Tax Return Preparers
    Taxpayers should be wary of professional tax preparers who refuse to sign tax returns or include their IRS Preparer Tax Identification Number (PTIN) on the prepared returns (often referred to as “ghost preparers”). Often, these preparers will charge a fee based on a proportion of the anticipated refund, typically resulting in incorrect and fraudulent return filings.
    
    
12. New Client Scams and Spear Phishing
    Scammers impersonate potential new clients in emails targeting tax professionals. Once the tax professional responds to the email, the scammer will send a malicious email attachment or URL that can compromise the tax professional’s computer system, allowing the scammer access to sensitive client data. 

Scammers are constantly devising new tax schemes to obtain personal taxpayer information through phishing. Fraudulent tax avoidance strategies, connected to exorbitant fees for assistance in pursuing the resulting fraudulent refunds, are also popular strategies for the nefarious. Taxpayers and tax preparers should be on the lookout for these schemes throughout the year, but especially during the tax season when scammers escalate their efforts. Heightened awareness and vigilance can mitigate the risk surrounding the Dirty Dozen in 2025 and any year. 

As always, taxpayers should talk to a trusted advisor for assistance in tax planning and preparation. And remember: If something sounds too good to be true, it probably is.