The IRS has named its annual Dirty Dozen list of 12 common tax scams to watch out for this year. These scams target taxpayers and tax pros, especially during tax season, but they can happen any time.
First, beware of phishing scams. Fraudsters send fake emails and texts pretending to be the IRS or other tax agencies. They want your information to steal your identity or money. Never click on suspicious links or share your data.
Social media is another hotspot for bad tax advice. Some people share false tips that can lead to costly mistakes or fraud. Stick to trusted sources like the IRS or certified tax professionals.
Next, swindlers can pose as a “helpful” third party and offer to help create your IRS Individual Online Account, but watch out! Third parties making these offers will try to steal your personal information and submit fraudulent tax returns in your name to get a big refund.
Watch out for fake charities, especially after disasters. Donate only to qualified organizations to avoid scams and false deductions.
Some taxpayers are tricked into claiming credits they do not qualify for, like the fuel tax credit or sick and family leave credits. Do not fall for promises of large refunds based on these.
The IRS is seeing repeated instances where taxpayers are attempting to incorrectly claim the sick and family leave credit, which was pandemic relief and can’t be claimed any longer.
Promoters market a non-existent self-employment tax as a way for entrepreneurs and gig workers to get big payments. There is inaccurate information being circulated that suggests many people qualify for the tax credit when they do not.
Another scam is inventing fictional household employees and claiming a refund based on false sick and family medical leave wages they never paid.
There are also scams where people create fake income or withhold information on tax forms to get bigger refunds. Filing false information risks penalties and audits.
Next, “mills” aggressively promote Offers in Compromise in misleading ways to people who don’t meet the qualifications, frequently costing taxpayers thousands of dollars paying for assistance they can’t use.
Ghost preparers are tax professionals who refuse to sign your return or give you a copy. Avoid them as they can cause serious problems.
Tax professionals themselves are targeted by phishing emails from scammers posing as new clients, aiming to steal sensitive information.
Beyond these twelve scams, the IRS warns there are many other schemes out there. Always be cautious, report suspicious activity, and rely on trusted professionals.
If you suspect a scam or abusive tax preparer, the IRS encourages you to report it using their online Form 14242.
Stay alert and protect yourself this tax season.
