IRS Releases Dirty Dozen List for 2025
The Internal Revenue Service (IRS) recently released its annual Dirty Dozen list, warning taxpayers about 12 common tax scams and schemes that could potentially threaten their tax and financial information.
This year’s Dirty Dozen list highlights the following 12 major threats:
1. Email Phishing Scams
The IRS warns of a surge in phishing (email) and smishing (text) scams targeting taxpayers and tax professionals. Scammers pose as legitimate organizations, including the IRS and state tax agencies, to steal personal and financial information. These messages tend to arrive in the form of unsolicited text messages and emails that lure taxpayers into providing confidential information. The IRS urges taxpayers to never click on unsolicited messages, as they may contain malware or ransomware that can compromise personal data.
2. Bad Social Media Advice
A growing concern for the 2025 tax season is incorrect tax information on social media that can mislead taxpayers with malicious advice. Social media platforms, such as TikTok, often circulate inaccurate or misleading tax information, with some urging people to misuse common tax documents like Form W-2. The IRS warns taxpayers not to fall for these scams and to only follow trusted tax advice from IRS and other reputable sources on social media.
3. IRS Individual Online Account Help from Scammers
Scammers are posing as a “helpful” third party to help taxpayers create an IRS Individual Online Account, when no help is actually needed. The third parties making these offers try to steal taxpayers’ personal information and submit fraudulent tax returns in the victim’s name to claim a large refund. The IRS Individual Online Account requires taxpayers to provide their own valuable personal information and the agency offers tips on how to sign up and avoid Individual Online Account scams.
4. Fake Charities
Bogus charities have been a recurring problem for years and intensify whenever a crisis or natural disaster occurs. In an attempt to exploit the public’s generosity, scammers create fake organizations seeking charitable donations and/or personal information they can use to commit identity theft.
5. False Fuel Tax Credit Claims
Over the past year, an increasing amount of taxpayers have been misled into believing they were eligible for the Fuel Tax Credit, which is meant for off-highway business and farming use and is not available to most taxpayers. However, dishonest tax preparers and promoters, including those on social media, continue to entice taxpayers into inflating their refunds by falsely claiming the credit. The IRS has seen an influx in the promotion of incorrectly claiming certain refundable credits using Form 4136, Credit for Federal Tax Paid on Fuels, and urges taxpayers to stay informed to ensure they are properly claiming the credit.
6. Credits for Sick Leave and Family Leave
Self-employed individuals who required qualifying sick leave and/or family leave related to the COVID-19 pandemic in 2020 or 2021 may qualify for certain tax credits. The IRS is seeing repeated instances where taxpayers are using Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals, to incorrectly claim these credits based on income earned as an employee and not as a self-employed individual.
7. Bogus Self-Employment Tax Credit
Misleading social media advice about a non-existent “Self-Employment Tax Credit” continues to spread, misleading taxpayers into filing false claims. Promoters falsely advertise that many self-employed individuals qualify for tax credit payments of up to $32,000 for the COVID-19 pandemic period, when they do not. In reality, the credit that is being referenced (properly called the Paid Sick and Family Leave Credit) pertains to eligible employers who paid wages for certain leave taken by employees related to the COVID-19 pandemic. The IRS is closely reviewing claims coming in under this provision, so taxpayers improperly filing these claims do so at their own risk.
8. Improper Household Employment Taxes
Household employees are professionals who perform household work in or around private residences, such as housekeepers, babysitters and landscapers. Malicious tax advisors “invent” fictional household employees and then file Schedule H (Form 1040), Household Employment Taxes, to claim a refund based on wages they never actually paid.
9. The Overstated Withholding Scam
A recent scheme that has been circulating on social media encourages taxpayers to fill out Form W-2 or other forms like Form 1099-NEC, Nonemployee Compensation, and other 1099-S, Proceeds From Real Estate Transactions, with false income and withholding information. Scam artists will suggest that taxpayers fabricate large income and withholding amounts, as well as a fictional employer supplying those amounts, and file the bogus return electronically in hopes of securing a substantial refund.
If the IRS cannot verify the wages, income or withholding credits entered on the tax return, the tax refund will be placed on hold while pending further review. Taxpayers should only use legitimate information, such as an employer-issued Form W-2, to complete their tax returns correctly.
10. Misleading Offers in Compromise
The Offers in Compromise (OIC) program helps taxpayers settle their federal tax debts when they are unable to pay in full. Ill-intentioned companies aggressively market OIC services to taxpayers who do not actually qualify, resulting in thousands of dollars in fines. The IRS provides a free Offer in Compromise Pre-Qualifier tool to help taxpayers confirm their eligibility and avoid these scams.
11. Ghost Tax Return Preparers
Most tax professionals provide skillful and experienced services to taxpayers. However, there are dishonest tax professionals (called “ghost” preparers) who charge a fee based on the size of the refund and/or are unwilling to sign the return using their IRS Preparer Tax Identification Number (PTIN) as required by law. Taxpayers should never sign a blank or incomplete return and should always turn to a trusted tax professional for help.
12. New Client Scams and Spear Phishing
The “new client” scam involves cybercriminals impersonating new or potential clients to trick tax professionals and other businesses into responding to their emails. Once the tax professional responds, the scammer will send a malicious attachment or URL that can compromise the preparer’s computer system and allow the attacker to access sensitive client information.
“Phishing” is when scammers send emails and test messages to solicit personal information, and “spear phishing” is a phishing attempt tailored to a specific organization. Tax professionals are often targeted by spear phishing attempts and should be cautious when receiving unusual emails or suspicious requests. Cybercriminals may sometimes hack directly into a client’s email account and send messages to the client’s tax professional. This tactic is especially difficult to detect because the emails come from a legitimate address, making them appear trustworthy.
How to Report Tax Scams
The IRS releases the Dirty Dozen to alert taxpayers and the tax professional community about the year’s most prevalent scams and schemes. However, there are a wide array of other abusive schemes and bogus tax avoidance strategies that can mislead taxpayers, such as those involving trusts, offshore schemes and even individual retirement arrangements. It’s important for taxpayers to stay vigilant for any type of tax scams and to report individuals who promote improper and abusive tax schemes, as well as preparers who deliberately prepare improper returns. To report any of these schemes, taxpayers can submit Form 14242, Report Suspected Abusive Tax Promotions or Preparers, along with any supporting material online or by mail to the IRS Lead Development Center in the Office of Promoter Investigations. Taxpayers and tax professionals can also send information to the IRS Whistleblower Office for a possible monetary award.
What Measures is the IRS Taking to Help Combat Against the Dirty Dozen?
In August 2024, the IRS, state tax agencies and the tax industry announced a joint effort to combat the growth of scam and scheme threats against taxpayers by creating a new task force called the Coalition Against Scam and Scheme Threats (CASST). The collaborative effort brings together stakeholders, resources and expertise to fight against scams. The primary objectives of CASST are to:
- Raise awareness
- Improve communication and coordination between the IRS, state tax authorities and the tax industry
- Develop and implement effective countermeasures to combat scams and schemes
- Enhance taxpayer protections and prevent identity theft.
Remember: Never give out personal or financial information unless it is to a trusted tax professional.