Dirty Dozen Tax Scams: What to Watch Out for This Tax Season

Can someone steal your tax refund? Unfortunately, yes! Tax season is already stressful, and it’s also one of the busiest times of the year for scammers.

Each year, the Internal Revenue Service (IRS) releases its Dirty Dozen Tax Scams to raise awareness among taxpayers: a list of common tax scams that target individuals during tax season. These schemes are designed to trick people into sharing sensitive personal or financial information, often leading to identity theft, fraudulent filings, or financial loss.

As these scams continue to evolve, understanding how they work and how to protect yourself is essential. Staying informed and using identity protection tools can help reduce your risk.

What are the Dirty Dozen tax scams?

The IRS Dirty Dozen is an annual list of the most prevalent and dangerous tax scams targeting taxpayers. While the specific tactics may change each year, the goal remains the same: to steal personal information, money, or both.

These scams often appear legitimate, using official-looking emails, texts, or even impersonating tax professionals or government agencies by phone.

How do these tax scams work?

While tactics vary, most scams fall into a few common categories. The IRS advises taxpayers to remain cautious year-round.

Here’s a breakdown of the Dirty Dozen threats:

1. IRS impersonation by email and text: These tactics are more commonly known as phishing and smishing scams. Scammers send fake emails or text messages that appear to be from the IRS. They ask to verify accounts, enter personal information, or claim refunds. The warning is to avoid clicking on unsolicited communications claiming to be from the IRS. By pointing to the link without clicking, you can see the address and check if the site is legitimate.
2. AI-enabled IRS impersonation by phone: Phone scams continue to evolve with computer-generated tactics such as robocalls, voice mimicry, and spoofed caller ID. Keep in mind that the IRS contacts taxpayers by mail first. It never leaves urgent prerecorded messages, calls to demand immediate payment, or threatens arrest.
3. Fake charities: Scammers solicit donations to fraudulent organizations, especially during crisis events. Ensure your donations go to qualified nonprofits, recognized by the IRS.
4. Social media tax misinformation: They create viral “tax hacks” with misleading advice encouraging improper or fraudulent tax filings, causing refund delays, audits, or penalties.The IRS urges people to follow only reputable sources for tax advice.
5. Identity theft: Criminals use stolen personal information to file fraudulent tax returns. They attempt to gain unauthorized access to a taxpayer’s IRS online account. Follow IRS-official guidance on how to protect your IRS account.
6. Abusive capital gains claims: Some scams involve filing exaggerated or completely fake claims for investment-related tax credits, sometimes tied to illegitimate or impersonated organizations. These improper filings can lead to refund delays, audits, penalties, or other enforcement actions.
7. Self-employment tax credit: Scammers encourage taxpayers to apply for credits they often don’t qualify for, resulting in inaccurate filings. Keep in mind to rely only on trusted sources to determine credit eligibility.
8. Ghost preparers: Fraudsters offer to prepare a return but refuse to sign it or include a Preparer Tax Identification Number (PTIN). If a tax preparer refuses to sign or provide the ID, then don’t file this return since you’re legally responsible for what is filed.
9. Non-cash charitable contribution: These schemes involve inflated property or art donations to reduce taxes owed. Remember that the IRS verifies donation claims.
10. Overstated withholding schemes: Some scams encourage taxpayers to falsely inflate how much tax was withheld from their income to claim a larger refund. These false claims can trigger delays, audits, or penalties when the IRS verifies the information.
11. Scams targeting tax professionals: Criminals send emails to tax professionals or tax businesses posing as a new client or requesting a client’s document. These emails include malicious links or attachments that can access systems to steal clients' data. The IRS warns these professionals to remain vigilant and strengthen their security practices.
12. Offer in compromise scams (OIC mills): Scammers promise people to settle tax debt when they’re unable to pay in full. These scams charge high fees without a legitimate qualification. To avoid high-pressure sales tactics, you can check eligibility using free IRS tools.

While the methods differ, these scams rely on urgency, fear, or opportunity to pressure individuals into acting quickly. Keep in mind that the best practice to protect yourself is not to click on unexpected links or open unexpected attachments. If you get a suspicious IRS-related call, hang up. Follow the IRS official statements, as they provide guidance on what to do next and how to report scams.

Who is at risk of tax scams?

The simple answer is everyone! Every taxpayer is at risk of falling victim to one of these Dirty Dozen scams. Some may be more frequently targeted, such as people filing taxes for the first time, those not familiar with the process, older adults, and small businesses.

What is the impact of these scams? Financial loss is the main consequence, including delayed legitimate tax returns. However, beyond financial loss, tax scams can lead to identity theft with long-term consequences. If criminals gain access to your Personal Identifiable Information (PII), such as your Social Security number, they may use it to steal your identity.

Then, your identity can be used to file fraudulent tax returns, open new financial accounts, or commit other forms of fraud. This can result in damaged credit, delayed refunds, more financial loss, and ongoing issues that take time and effort to resolve.

As these scams become more widespread, having tools to monitor your personal information to protect your identity can make all the difference.

How can IDShield® membership plans help protect your identity from tax scammers?

Tax season is a prime time for scammers to steal personal information and commit identity theft. Arm yourself against these threats with IDShield identity theft protection services!

IDShield continuously monitors your personal information, such as Social Security Numbers, across credit reports, banking accounts, public records, and dark web marketplaces. If suspicious activity is detected, you'll receive real-time notifications.

Here’s how IDShield helps protect your private data:

• Cybersecurity and Device Protection: Stay safe with Trend Micro’s VPN, malware protection, and parental controls.
• Password Manager: Get multiple device protection and privacy for your digital life with our Password Manager service that manages and encrypts passwords.  
• Credit Freeze Assistance: A Licensed Private Investigator will assist with placing a credit freeze and/or fraud alert on your credit reports in the event of a breach or other identity theft incident.
• Full-Service Restoration: In the event of identity theft, our Licensed Private Investigators will work to restore your identity to its pre-theft status.
• Unlimited Consultation: Talk to an identity theft specialist about any identity theft or online privacy concern.

Don’t wait until a tax scam affects you! Protect your identity with IDShield today!

About the author: Alicia Baquero, Senior Content Creator at LegalShield, creates informative content to help readers navigate legal and identity protection topics. She focuses on simplifying complex concepts into practical guidance for individuals, families, and small businesses. Alicia contributes to educational content for the blog and sales enablement content for B2B.

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