IRS 2025 Dirty Dozen: Major Tax Scams to Watch

The Internal Revenue Service (IRS) has released its annual "Dirty Dozen" list for 2025, highlighting prevalent tax scams that pose significant threats to taxpayers, businesses, and tax professionals.

1. New Client Scams and Spear Phishing: Cybercriminals are impersonating potential clients to deceive tax professionals. These fraudsters send emails containing malicious attachments or links, which, when opened, compromise computer systems and grant access to sensitive client data. Every email requesting information is not a prospect. Check the address from which the email was actually sent.

2. Phishing and Smishing Schemes: Scammers use emails and text messages to trick individuals into revealing personal information. The IRS doesn’t send emails or texts. A recent tactic involves sending texts that promise economic impact payments, directing recipients to fraudulent websites that harvest sensitive data.

3. Tax Identity Theft: Fraudsters file fake tax returns using stolen personal details, such as Social Security numbers, to claim refunds. Victims often face rejected legitimate returns and prolonged resolution processes. If you filed and your return is rejected for having already been filed, immediately freeze your credit bureau accounts and call us at Books, Taxes & More

4. Ghost Tax Preparers: Unethical tax preparers, known as "ghost preparers," fail to sign tax returns they prepare, leaving taxpayers responsible for any errors or fraudulent claims. These preparers may promise large refunds and charge fees based on a percentage of the refund which is highly unethical.

5. Abusive Tax Avoidance Schemes: The IRS warns against complex arrangements that purport to reduce tax liability improperly. These schemes often involve abusive micro-captive insurance arrangements or other strategies that lack economic substance. These are often violations of law with all the nasty results. Remember, if it sounds too good to be true, it is.

6. Inflated Refund Claims: Some scammers encourage taxpayers to invent large income and withholding amounts to claim substantial refunds. This fraudulent practice can result in severe penalties and repayment of the erroneous refund with interest. In some cases, it can result in criminal persecution.

7. Fake Charities: Fraudsters establish bogus charities to exploit the generosity of taxpayers, especially following major disasters. Contributions to these fake organizations are not tax-deductible, and personal information provided may be misused. Know where you are sending money.

8. Unscrupulous Tax Return Preparers: While most tax professionals provide honest service, some dishonest preparers commit fraud or file returns improperly. Taxpayers should choose preparers carefully, ensuring they are qualified and reputable. At Books, Taxes and More, we will search for every legitimate deduction. As a policy, we never fudge any part of a return and will withdraw from any engagement where such activity is suggested by a client.

9. Social Media Scams: Scammers use social media platforms to circulate misleading information, such as false tax refund claims or bogus credits. One should only get information from the IRS website, our website at bookstaxesatl.com, or get in touch with us at steve@bookstaxesatl.com.

10. Offer in Compromise Mills: Agencies mislead taxpayers into believing they can settle tax debts for pennies on the dollar through the IRS's Offer in Compromise (OIC) program. We have all seen the late-night commercials of the actor standing in front of a luxury car with their success story. Rest assured, that person doesn’t own the car, they probably drive it for the actual owner.

11. Payroll and HR Scams: Cybercriminals target payroll and human resource professionals to steal personal information or W-2 forms through phishing schemes. Businesses must educate employees about these scams and implement robust security measures. If you work for a company, ask the HR department how they protect your personal information. They should be more than willing to explain their process.

12. Ransomware: Malicious software designed to block access to a computer system until a sum of money is paid. Taxpayers and tax professionals should use security software, avoid suspicious emails, and back up data regularly to protect against ransomware attacks. At Books Taxes & More, we are dedicated to security using great vendors, on a wired network constantly monitored.

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IRS 2025 Dirty Dozen: Major Tax Scams to Watch

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