Every year, the IRS warns taxpayers about common scams that criminals use to steal money, refunds, and personal information. These scams are often called the “Dirty Dozen” tax scams because they highlight the most dangerous schemes that appear during tax season.
Scammers know that many people are expecting refunds, filing documents, and sharing sensitive financial information. Because of this, tax season becomes a perfect opportunity for criminals to trick taxpayers.
Understanding how these scams work can help you avoid serious financial problems, identity theft, or IRS penalties. Below are 10 tax scams taxpayers should be aware of.
Fake IRS Emails and Text Messages
One of the most common scams involves fake emails or text messages pretending to be from the IRS. These messages usually say there is a problem with your tax return or that you are eligible for a refund.
The message may include a link asking you to confirm personal information such as your Social Security number, banking information, or login credentials. Once you enter the information, scammers can steal your identity or access your financial accounts.
The IRS generally does not contact taxpayers through text messages or social media asking for personal information. If you receive a message like this, it is very likely a scam.
Phone Calls Pretending to Be IRS Agents
Another common scam involves phone calls from people pretending to work for the IRS. These callers often sound convincing and may even use technology that makes the caller ID look like it is coming from a government office.
The scammer may say you owe taxes and threaten you with arrest, legal action, or deportation if you do not pay immediately. They often demand payment using gift cards, wire transfers, or cryptocurrency. The real IRS does not demand immediate payment over the phone or threaten taxpayers with arrest.
Social Media Tax Advice Scams
Social media platforms are full of tax advice, but not all of it is correct. Some influencers or promoters encourage taxpayers to claim credits or deductions they are not eligible for.
These so-called “tax hacks” may promise larger refunds, but they often involve filing incorrect information. If the IRS discovers the mistake, the taxpayer can be responsible for paying back the refund, along with penalties and interest. Tax advice should always come from trusted professionals who understand current tax laws.
Fake Self-Employment Tax Credit Promotions
A growing scam involves promoters advertising a “special self-employment tax credit.” These scams target freelancers, gig workers, and small business owners.
The promoter may promise a large refund and charge a fee to prepare the return. In many cases, the credit being claimed does not actually exist, or the taxpayer does not qualify for it.
When the IRS reviews the return, the taxpayer may have to repay the refund and could face additional penalties.
Scammers Offering to Create IRS Online Accounts
Some criminals pretend they can help taxpayers create their IRS online accounts. While this may sound helpful, the real goal is to gain access to your tax records and personal information. Once scammers gain access, they can file fraudulent tax returns, change banking information, or steal sensitive data.
Taxpayers should always create IRS accounts themselves through official government channels.
Fake Charities Asking for Donations
After natural disasters or major events, scammers often create fake charities that appear to support victims. They may ask for donations through email, phone calls, or social media.
While many people donate with good intentions, the money may never reach the intended cause. In some cases, scammers also collect personal information that can be used for identity theft. Before donating, it is always a good idea to research the charity and confirm that it is legitimate.
False Household Employee Claims
Some scammers encourage taxpayers to claim fake household employees on their tax returns. This scheme is designed to generate tax credits or refunds that the taxpayer does not qualify for.
For example, someone might be told to report wages for a household worker who never actually existed. Submitting false information on a tax return can lead to audits, penalties, and repayment of the refund.
Inflated Withholding Refund Scams
In this scam, taxpayers are encouraged to submit tax forms showing false income or withholding amounts in order to claim a larger refund.
Some schemes even suggest creating fake employers or altering tax documents to increase withholding amounts. Although it may appear to generate a large refund initially, the IRS often detects these irregularities and requires the taxpayer to repay the money.
Tax Debt Relief Scams
Many companies advertise services claiming they can settle tax debts for “pennies on the dollar.” While legitimate tax relief programs do exist, many of these companies charge large fees and make unrealistic promises. Some taxpayers end up paying thousands of dollars in fees without receiving the help they expected.
Before hiring any company for tax relief services, it is important to understand what programs you actually qualify for.
Abusive Capital Gains Credit Schemes
A newer scam involves claiming credits related to undistributed capital gains. Some promoters instruct taxpayers to file certain forms to claim credits they do not qualify for.
These schemes are often complicated and confusing, which makes them attractive to scammers trying to take advantage of taxpayers who do not fully understand the rules. Filing incorrect credit claims can delay refunds and may trigger an IRS investigation.
How Local Tax Can Help Protect You
Tax scams are becoming more advanced every year, and many people do not realize they have been targeted until it is too late. Working with a trusted tax professional can help reduce the risk of falling for these scams.
At Local Tax, our team helps individuals, freelancers, and small business owners file their taxes accurately and safely. We review your tax documents carefully, make sure all credits and deductions are legitimate, and help protect you from misleading tax advice or fraudulent schemes.
If you ever receive suspicious tax messages, phone calls, or refund offers, it is always better to verify the information before taking action.
Local Tax has been helping clients across Los Angeles County since 2009 with tax preparation, bookkeeping, and small business tax services.
If you need help filing your taxes or have questions about a suspicious tax situation, our team is here to help.
Local Tax
9429 Somerset Blvd
Bellflower, CA 90706
Phone: (562) 925-2203
Working with a trusted tax professional can help you avoid costly mistakes and keep your financial information safe.
