Ryan Vaughn breaks down the IRS's 2025 Dirty Dozen list of tax scams targeting small-business owners. Learn how phishing, fake charities, fraudulent tax credits, and ghost preparers work, plus how to spot them. The IRS never initiates contact by email, text, or social media asking for personal information.
The 2025 IRS Dirty Dozen List. As a business owner, your mind is already racing with a million different things. The last thing you wanna worry about is a tax scam. Each year, the IRS releases an annual list of the most common schemes that threaten taxpayers, businesses, and tax professionals. It's called the Dirty Dozen List, and we're breaking it down so you can stay informed and protected. Scam number 1, phishing and smishing attacks. You've probably run into this one at some point. This is one of the most common scams. Cybercriminals pretend to be the IRS in emails, phishing, or text messages To trick you into revealing personal information or sending money. They can be very convincing, using alarming language or the promise of a big refund to get you to click a link. It's important to know the IRS will never initiate contact with you by email, text, or social media to ask for your personal or financial information. If you get a suspicious message, do not click any links. Scam number 2: Bogus social media tax advice. The amount of incorrect tax information on social media is growing every year. You'll see people encouraging you to misuse common tax documents or claim fake credits credits to get a bigger refund. This is just clickbait. Following this kind of advice can lead you straight into an audit and a heap of penalties. A real tax strategy is tailored to your unique situation. If a tip sounds too good to be true, there's a good chance it is. Make sure you're talking to a professional and taking the right precautions. Scam number 3: Fake charities. Bogus charities are a constant problem, especially after a crisis or natural disaster. Scammers set up these fake organizations to take advantage of people's generosity, to get their money and their personal information. Always verify a charity's You can use the Tax-Exempt Organizations Search Tool on irs.gov. Scam number 4: Fraudulent Tax Credit Claims. The IRS is seeing scams involving false claims for various tax credits, including the fuel tax credit, the credits for sick leave and family leave, and even types of nonexistent self-employment tax credits being promoted on social media. These credits have very specific requirements and aren't applicable to most taxpayers. Be wary of anyone promising you a credit that seems too good to be true. Scam number 5: overstated withholding. This scheme, often seen on social media, encourages people to file fake Forms W-2 or 1099 with exaggerated income and withholding amounts to try to get a larger refund. This is tax fraud. The IRS flags and holds these fraudulent returns for review. You can avoid this scam by making sure your documents are authentic and your reported income and withholdings are accurate. Again, you should be consulting a professional accountant to verify your forms. Scam number 6: Proper household employment taxes. In this scam, scammers invent fictional household employees and file a Schedule H to falsely claim a refund based on fake sick leave and family medical leave wages that were never paid. This is another very clear case of tax fraud. Make sure your tax return is honest and accurate and that you have proper documentation to back up any claims. Scam number 7, misleading offers in compromise. An offer in compromise is a legitimate program, but shady promoters aggressively market it to unqualified taxpayers, charging large fees and promising to settle tax debt for pennies on the dollar. If you have overwhelming tax debt, speak with a qualified tax professional. The IRS has a free tool to help you see if you qualify. Scam number 8: Ghost preparers. A ghost preparer is a tax professional who prepares your return but refuses to sign it. They often prepare illegal returns with inflated refunds, then disappear when the IRS comes knocking, leaving you to face the penalties. Always work with a licensed professional who signs your return and includes their preparer tax identification number. Scam number 9: New client spear phishing. This one targets tax professionals. Cybercriminals pose as potential new clients to trick tax professionals into opening malicious attachments or links, compromising their systems and allowing them to access sensitive client information. It's important to work with a team that takes your privacy and security seriously. Scam number 10: IRS Individual Online Account Scams. Scammers may offer to help you set up an IRS Individual Online Account to steal your tax and personal information. You should only create an IRS Individual Online Account directly from the official IRS.gov website. Do not accept unsolicited offers of help. Scam number 11: abusive tax shelters. These are complex schemes marketed by promoters to help people avoid paying taxes. Participating in them can lead to sufficient penalties. If a strategy seems overly complex or again too good to be true, it's a major red flag. Always consult with a qualified tax professional to ensure you're following a legal and ethical strategy. Scam number 12: payroll and HR scams. Cybercriminals target payroll and HR professionals to steal personal Businesses should have strong cybersecurity protocols in place and be cautious with any suspicious requests, even if they seem to be coming from a trusted source. This list isn't about living in fear. It's about being informed and prepared. We believe small business owners like you shouldn't have to navigate a confusing tax landscape alone. You're working hard and deserve to achieve success without sacrificing your well-being. Let us help you put a strategic tax plan in place so you can feel confident and secure. And remember, even if it looks like they're trying to help you with this list, it's to protect their money, not yours. The IRS is not your friend.
