The IRS has released its annual “Dirty Dozen” list of tax scams for 2025, highlighting schemes, abusive tax transactions, and tax avoidance strategies that taxpayers and tax preparers should be aware of. This list serves as a warning to help individuals avoid falling victim to fraudulent activities and misinformation. Below are some of the most relevant scams and tax avoidance schemes emphasized this year.
1. Bad Tax Advice on Social Media
The spread of inaccurate tax information on social media, particularly TikTok, continues to be a significant concern. The IRS warns taxpayers to be cautious of tax advice found online, as it can lead to tax problems and even identity theft. Two recent scams gaining traction include:
- Fraudulent W-2 Scheme – This scheme encourages individuals to use tax software to create a fraudulent Form W-2 with false employer details, income, and withholding amounts to claim a large refund fraudulently.
- Form 8944 Scam – Taxpayers are falsely advised to submit Form 8944 (Preparer E-File Hardship Waiver Request) in an attempt to claim a refund improperly.
Filing false tax returns can result in serious consequences, including civil and criminal penalties, a frivolous return penalty of $5,000, and potential prosecution.
[More details: IRS News Release IR-2024-98]
2. Identity Theft Related Schemes
The IRS continues to warn taxpayers and tax professionals about identity theft scams, including:
- Phishing and Smishing Attacks – Fraudsters send phishing emails and smishing (SMS phishing) texts impersonating the IRS, often claiming an account has been locked or requires urgent action.
- Fake IRS Online Account Assistance – Scammers offer to help taxpayers set up an IRS online account, only to steal their personal information, including Social Security numbers and photo IDs.
- “New Client” Tax Preparer Scam – Fraudsters send emails to tax professionals posing as potential clients. If the preparer responds, they may receive malicious attachments or links that compromise their computer system and steal sensitive client data.
[More details: IRS News Release IR-2024-87 & IR-2024-05]
3. Abusive Credit Schemes
The IRS is focusing on two major abusive credit schemes this year:
- False Fuel Tax Credit Claims – Scammers promote fraudulent claims for the fuel tax credit, which is only available for off-highway business and farming use.
- Fake Charities – Scammers set up fake charities, especially after disasters, to steal donations and personal information from unsuspecting taxpayers.
[More details: IRS News Release IR-2025-12 & IR-2024-92]
4. Overstated Withholding Scam
A new social media tax scam encourages individuals to falsify income and withholding amounts on tax forms (such as Form W-2 and Form 1099-NEC) to claim large refunds. The IRS warns that submitting false withholding information can lead to severe penalties, audits, and legal consequences.
[More details: IRS Fact Sheet FS-2024-24]
5. Other Notable Tax Scams in 2025
The IRS also highlights additional tax scams to be aware of:
- Ghost Tax Preparers – Unregistered preparers who fail to sign tax returns, leaving taxpayers liable for any fraudulent claims.
- Improper Household Employment Taxes – Employers failing to report wages paid to household workers properly.
- Misleading Offers in Compromise – Misrepresentation of IRS debt settlement programs to lure taxpayers into paying for services they may not need.
- Bogus Self-Employment Tax Credit Claims – Fraudulent claims for tax credits intended for self-employed individuals.
- False Sick and Family Leave Credit Claims – Misuse of pandemic-era tax credits that are no longer available.
[More details: IRS Dirty Dozen page]
Stay Informed and Protect Yourself
Taxpayers and tax professionals should remain vigilant against scams, avoid following unverified tax advice on social media, and report any suspicious tax schemes to the IRS. For the latest updates, visit the official IRS website.
By staying informed and cautious, taxpayers can avoid becoming victims of fraudulent schemes and ensure they remain compliant with tax laws.
