Starting in 2002, and every year since, the IRS has published its list of the top tax scams that taxpayers should be aware of, known as the Dirty Dozen. Parker Durham and I have discussed the IRS’s Dirty Dozen list in prior years.[1] Recently, the IRS released its Dirty Dozen list for 2025.[2] While last year’s list did not change at all compared to the 2023 list, this year’s list has removed several of the high-profile items from prior years. Notably, both the Employee Retention Credit (“ERC”) and Bogus Tax Avoidance Strategies (which as I discussed in my prior Dirty Dozen articles, are items that the IRS believes to be abusive, including syndicated conservation easements) are among the items that did not make the list this year. Since Treasury and the IRS issued final regulations identifying syndicated conservation easements as “listed transactions” last year coupled with the passage of the Charitable Conservation Easement Program Integrity Act, perhaps the frequency of those transactions has started to decrease. Likewise, the ERC was only applicable to certain time periods during the COVID-19 pandemic, such that the deadline to apply for these credits has largely passed. However, the inclusion of items related to the Credits for Sick Leave and Family Leave, which, similar to the ERC, were only available during the COVID-19 pandemic, indicates that the IRS is still dealing with fallout from other COVID-19 era items.
Phishing and Smishing
We begin the 2025 list with several returning favorites, the first of which is Phishing. Phishing is a common tactic used by scammers to trick taxpayers into providing personal and financial information. This can include passwords, Social Security numbers, and credit card information. Scammers will often use email, phone calls, or text messages (known as “smishing”) to lure their victims into giving up their information.
In recent years, phishing and smishing scams have become more sophisticated, with scammers using more advanced techniques to make their messages look legitimate. For example, they may use logos and branding from well-known companies to make their emails look like they’re from a legitimate source. They may also create fake websites that look like the real thing to trick taxpayers into entering their personal information. Another variation involves sending emails from addresses that look very similar to the intended sender’s. By way of example, if the purported sender’s email address was “johndoe@lawfirm.com”, the scammer might create the following email address “johndoe@lawfiirm.com.” Note the extra “i” in “firm.”
To protect themselves from phishing and smishing scams, it’s important for taxpayers to be cautious when opening emails or text messages from unknown senders. They should not click on links or download attachments from these messages, as they may contain malware that can steal personal information. Instead, taxpayers should visit the company’s website directly by typing the address into their browser or using a saved bookmark.
Taxpayers should similarly be aware of emails or messages claiming to be from the IRS. The IRS will never initiate contact with taxpayers by email or text message, or social media channels to request personal or financial information. Taxpayers should not click on links claiming to be from the IRS and should be wary of emails and websites, as they may be nothing more than scams to steal personal information.
Unscrupulous Tax Return Preparers
Selecting the right return preparer is important. They are entrusted with a taxpayer’s sensitive personal data. Most tax professionals provide honest, high-quality service, but dishonest preparers pop up every filing season committing fraud, harming innocent taxpayers, or convincing taxpayers to do illegal things they later regret. Unscrupulous tax preparers can steal refunds, charge inflated fees, and engage in other illegal activities. Often the preparer promises a large refund, but accomplishes such by claiming bogus deductions or credits, falsifying information, or other illicit methods. If the tax preparer commits tax fraud, the taxpayer is generally going to be held responsible for any penalties or fees that result. In some cases, the preparer may even use their client’s personal information to commit identity theft, leading to serious financial and legal problems.
Taxpayers should avoid so-called “ghost” preparers who expose their clients to potentially serious filing mistakes as well as possible tax fraud and risk of losing their refunds. Ghost preparers do not sign the tax returns they prepare. They may print the tax return and tell the taxpayer to sign and mail it to the IRS. For e-filed returns, the ghost preparer will prepare but not digitally sign as the paid preparer. By law, anyone who is paid to prepare or assists in preparing federal tax returns must have a Preparer Tax Identification Number (PTIN).[3] Paid preparers must sign and include their PTIN on returns.[4]
To avoid return preparer fraud, it is important for taxpayers to do their research before hiring a tax preparer. Taxpayers should look for preparers who have a PTIN and who are members of professional organizations such as the National Association of Enrolled Agents or the American Institute of Certified Public Accountants and avoid preparers who promise inflated refunds or who charge excessive fees. Taxpayers must remember that they are ultimately responsible for the accuracy of their tax return and should review it carefully before signing and submitting it.
Fake Charities
Fake charities are a common tax scam that can be especially prevalent in times of crisis or natural disasters. These scammers prey on people’s willingness to help those in need and use a variety of tactics to solicit donations that never actually make it to the intended cause, such as cold calling, sending unsolicited emails or letters, or even going door-to-door. These organizations may use similar names or logos to real charities in order to trick donors into giving money. They may use high-pressure tactics to get taxpayers to donate, such as claiming that they will receive a tax deduction for their contribution.
To avoid fake charities, it’s important that taxpayers research any charity before making a donation. Potential donors should ask the fundraiser for the charity’s exact name, employer identification number, web address, and mailing address, and confirm such information with tools like the IRS’s Tax Exempt Organization Search or to IRS Publication 78 Data available here. Taxpayers should be wary of charities that pressure them to make an immediate donation or that refuse to provide the above-mentioned detailed information. A legitimate charity will be happy to get a donation at any time, so there is no rush. If the taxpayer decides to make a donation, they should not give cash and should avoid any charity which requests payment in the form of a gift card or by wire. Instead, taxpayers can use a credit card or check, which can be tracked (and possibly cancelled or reverse charged) and provide a record of the donation.
Offer in Compromise Mills
An offer in compromise (“OIC”) is a program offered by the IRS that allows taxpayers to settle their tax debt for less than the full amount owed under Section 7122. Unfortunately, there are some unscrupulous companies that exaggerate chances to settle tax debts for “pennies on the dollar” so they can collect a hefty fee from vulnerable taxpayers already struggling with their finances. These scams are commonly called OIC “mills,” which cast a wide net for taxpayers, charge them pricey fees (often upfront), and churn out applications for a program the taxpayers are unlikely to qualify for.
Generally, the IRS will accept an OIC when it is unlikely that the tax liability can be collected in full, and the amount offered by the taxpayer reasonably reflects the taxpayer’s collection potential. The goal of an OIC is to collect what is potentially collectible at the earliest possible time and at the least cost to the government.
Although the OIC program helps thousands of taxpayers each year reduce their tax debt, not everyone qualifies for an OIC. Taxpayers should be especially wary of promoters who claim they can obtain larger offer settlements than others, that claim they have a special relationship with the IRS that will allow them to negotiate better deals, or who make promises that the IRS will accept an offer for a small percentage. According to the IRS, companies advertising on TV or radio frequently cannot do anything for taxpayers that they cannot do for themselves by contacting the IRS directly. The IRS suggests taxpayers go to IRS.gov and review the Offer in Compromise Pre-Qualifier Tool to see if they qualify for an OIC.
Online Account Help from Third-Party Scammers
Online account help from third-party scammers is a common tax scam that has become increasingly prevalent in recent years. This scam involves fraudsters posing as IRS representatives or third-party tax professionals and offering to “help” taxpayers with their IRS online accounts. The scammers may contact taxpayers by phone, email, or social media, and may use a variety of tactics to convince them to provide personal information or payment.
In some cases, the scammers may claim that the taxpayer’s online account has been compromised or that there is a problem with their tax return. They may then offer to help the taxpayer resolve the issue, but will require them to provide personal information, such as their Social Security number or bank account details, or make a payment. In other cases, the scammers may claim to be able to help the taxpayer access tax refunds or credits that they are not entitled to and may request a payment in exchange for their assistance.
Taxpayers can set up their own IRS online accounts for free at IRS.gov and should be the only ones to establish their account. Taxpayers should not accept third-party assistance (other than the approved IRS authentication process through IRS.gov) to set up their accounts and should NEVER share their account information with anyone.
Social Media: Fraudulent Form Filing and Bad Advice
Social media has become a popular platform for spreading misinformation and fraudulent activities, and unfortunately, tax scams and bogus tax advice are no exceptions. One way scammers exploit social media platforms is by creating fake accounts or pages that appear to be legitimate government agencies or tax preparation companies. They may then use these accounts to solicit personal information or to spread misinformation about tax laws and regulations.
Another common tactic is to offer free or low-cost tax preparation services through social media. These services may be advertised as a way to save money or to simplify the tax preparation process, but in reality, they are often a ploy to collect personal information or to trick taxpayers into paying fees for unnecessary or fraudulent services.
With the increasing popularity of TikTok, the platform has become a breeding ground for inaccurate and misleading tax information. This misinformation can cause confusion and may lead taxpayers to make costly mistakes on their tax returns. Several recent examples noted by the IRS include advice regarding common tax documents like Form W-2 (described in more detail below as the Overstated Withholding Scam) or more obscure ones like Form 8944. While Form 8944 is real, it is intended for tax return preparers who are requesting a waiver so they can file tax returns on paper instead of electronically. It is not a form the average taxpayer can use to avoid tax bills. Both schemes encourage people to submit false, inaccurate information in hopes of getting a refund.
Taxpayers should be cautious of any offers and information that seem too good to be true, such as promises of large tax refunds or excessively low tax preparation fees. As with several of the other scams on the Dirty Dozen list, taxpayers should be wary of unsolicited communications regarding tax advice or tax preparation services. To protect against compromising their account information, taxpayers should always use strong, unique passwords for all of their social media and online accounts and can consider using two-factor authentication for added security.
Spearphishing and Cybersecurity for Tax Professionals
Spearphishing is a type of phishing that focuses on targeting specific individuals or organizations. These messages often contain malicious links or attachments that can steal sensitive information or install malware on the victim’s computer. In the context of tax scams, spearphishing often involves targeting tax professionals, such as accountants and tax preparers, who have access to sensitive financial information. Scammers may send emails that appear to come from the IRS or other legitimate sources, requesting login credentials or other sensitive information. Once the scammers have access to this information, they can use it to file fraudulent tax returns or engage in other types of identity theft. This can be particularly damaging for tax professionals, who may be held liable for any losses suffered by their clients because of a data breach.
Steps that tax professionals can take to prevent spearphishing and other cybercrime include training all employees on cybersecurity best practices, using strong passwords and two-factor authentication, installing antivirus software, encrypting sensitive data, and keeping systems and software up to date.
False Fuel Tax Credit Claims
The first of several tax credit issues on the 2025 Dirty Dozen list is related to the fuel tax credit. This scam has been listed on several of the Dirty Dozen lists in recent years. The fuel tax credit is available to certain taxpayers who use gasoline, diesel fuel, or other types of fuel for certain purposes, such as farming or off-highway business use. The credit is designed to offset the federal excise tax that is included in the price of fuel. However, scammers will often claim the credit for non-qualifying uses of fuel (such as personal use), claiming the credit for fuel that was not actually used, or claiming the credit for more fuel than was actually used.
Most of the false fuel credit claims are perpetrated by taxpayers themselves, often after being pitched to taxpayers from promoters. Additionally, the IRS has stated that it has implemented new identity theft screening filters and processing systems that stop many suspicious Fuel Tax Credit refund claims.[5] Thus, it is even more important for taxpayers to understand the eligibility requirements for the credit. The credit is only available for certain uses of fuel, such as farming or off-highway business use. Taxpayers should of course ensure they keep detailed records of fuel usage and only claim the credit for eligible vehicles and purposes. Of course, having a reputable tax professional to assist is always recommended.
Credits for Sick Leave and Family Leave
Certain eligible employers were entitled to refundable tax credits for wages paid for certain leave taken by employees related to the COVID–19 pandemic to recover from any injury, disability, illness, or condition related to vaccinations. Comparable credits were likewise available to self-employed individuals (referred to as the “Credits for Sick Leave and Family Leave”). However, these credits were only available for certain periods during 2020 and 2021. To qualify for the Credits for Sick Leave and Family Leave, self-employed workers had to meet a variety of technical reasons in 2020 and 2021 that didn’t allow them to work, including caring for an individual subject to a quarantine or isolation order. The IRS has a detailed set of FAQs describing the very technical requirements qualifying for the credits.[6] The IRS has seen repeated instances where taxpayers have attempted to claim the credits based on income the taxpayer earned as an employee and not as a self-employed individual and/or where the taxpayer attempted to claim the credit for a period after 2021. Like the fuel tax credit claims, fraudulently claiming the Credits for Sick Leave and Family Leave is a result of improper action by a taxpayer and could result in penalties and interest. Taxpayers should be wary of attempts to convince them to claim credits they do not understand, especially when the IRS has stated that it is on the lookout for taxpayers claiming the credits in question.
Bogus Self-Employment Tax Credit
The issues related to the Credits for Sick Leave and Family Leave are apparently so pervasive that the IRS included other misinformation related to them as another item on the 2025 Dirty Dozen List. Promoters appear to be circulating false information about a non-existent “Self Employment Tax Credit”, which, in reality, is the aforementioned Credits for Sick Leave and Family Leave. The misinformation related to this non-existent credit is especially prevalent on social media, where inaccurate information suggests that many taxpayers qualify for the “credit” and are eligible to receive refundable payments of up to $32,000. Again, taxpayers should always consult with an experienced tax professional to ensure that they are properly reporting items on their tax returns. This is especially true for complex credits such as the Credits for Sick Leave and Family Leave.
Improper Household Employment Taxes
Yet another item on the 2025 Dirty Dozen list is related to sick and family leave. There is a recent form of tax fraud whereby certain dubious taxpayers “invent” fictional household employees and then claim a refund based on false sick and family medical leave wages they allegedly paid to the invented household employees. This type of fraud is very hard to defend, and taxpayers should expect little sympathy from the IRS if discovered. Taxpayers should know that they did not have a household employee and that they did not pay them any wages. Even if someone tries to convince the taxpayer that the IRS will not catch them, or that everyone is doing the same, taxpayers should know that this type of action is wrong.
The Overstated Withholding Scam
Yet another scheme broadcasted on social media is one encouraging taxpayers to fill out tax documents such as Form W-2, Schedule K-1, Form 1099-NEC, and other Form 1099s with false income and withholding information. Taxpayers are encouraged to use tax software to manually fill out the tax documents by inventing large income and withholding amounts as well as the fictional employer supplying those amounts. Taxpayers are then instructed to file the bogus tax return electronically in hopes of getting a substantial refund due to the large amount of fraudulent withholding. However, according to the IRS, it verifies the withholding claimed on tax returns. The IRS also claims that if it cannot verify the wages, income or withholding credits entered on the tax return, the tax refund will be held pending further review.
“These improper claims have been fueled by social media and people sharing bad advice,” former IRS Commissioner Daniel Werfel said.[7] “Scam artists constantly prey on people’s hopes and try to use the complexity of the tax system to convince people there are secret ways to get a big refund. All of these scams illustrate that it’s important to carefully review the tax return for accuracy before filing and rely on the advice of a trusted tax professional, not someone trying to make a quick buck or a questionable source on social media.”[8]
Conclusion
Since 2002 the IRS has published its Dirty Dozen list each year. Primary among its motivations for publishing the Dirty Dozen list is to inform unwary taxpayers of those schemes that might be perpetrated against them, to reduce the likelihood of success. This year, there appears to be more items that are perpetrated by taxpayers themselves (typically after such items were “promoted” to the taxpayer, such as through social media). The IRS likely includes these types of items to put taxpayers on notice that they are on the lookout for them in an attempt to curb the number of taxpayers who might otherwise be tempted to commit one of these acts. As always, taxpayers should be wary of tax advice that sounds too good to be true and generally any tax advice from social media. When in doubt, taxpayers should consult a qualified tax professional for advice.
[1] Devin Mills, “IRS Demands iTunes Cards? Beware the Dirty Dozen!” (September 14, 2021), https://esapllc.com/scams-and-dirty-dozen-2021/#_ftn13; Devin Mills, “2023 Dirty Dozen List” (April 19, 2023), https://www.esapllc.com/irs-dirty-dozen-2023/; and Parker Durham, “The 2024 Dirty Dozen – The IRS’s Annual Warning” (April 17, 2024), https://www.esapllc.com/the-2024-dirty-dozen/.
[2] IR-2025-26 (February 27, 2025), https://www.irs.gov/newsroom/dirty-dozen-tax-scams-for-2025-irs-warns-taxpayers-to-watch-out-for-dangerous-threats.
[3] Treas. Reg. § 1.6109-2(d).
[4] IRC § 6109(a)(4) and Treas. Reg. §§ 1.6109-2(a)(1), 1.6109-2(a)(2)(ii), 1.6695-1(c)(1).
[5] IRS, “Dirty Dozen: IRS warns about false Fuel Tax Credit claims; taxpayers should be wary of scammers, heightened review” (April 2, 2024), https://www.irs.gov/newsroom/dirty-dozen-irs-warns-about-false-fuel-tax-credit-claims-taxpayers-should-be-wary-of-scammers-heightened-review.
[6] See the following related to eligibility for 2021, IRS, “Tax Credits for Paid Leave Under the American Rescue Plan Act of 2021: Specific Provisions Related to Self-Employed Individuals” (March 3, 2024), https://www.irs.gov/newsroom/tax-credits-for-paid-leave-under-the-american-rescue-plan-act-of-2021-specific-provisions-related-to-self-employed-individuals.
[7] IRS, “IRS warns taxpayers about misleading claims about non-existent “Self Employment Tax Credit;” promoters, social media peddling inaccurate eligibility suggestions” (July 15, 2024), https://www.irs.gov/newsroom/irs-warns-taxpayers-about-misleading-claims-about-non-existent-self-employment-tax-credit-promoters-social-media-peddling-inaccurate-eligibility-suggestions.
[8] Id.
