The IRS released the 2023 “Dirty Dozen List”. It is intended to alert taxpayers and the tax professional community about various scams and schemes.
- Employee Retention Credit Claims: Taxpayers should be aware of aggressive pitches from scammers who promote large refunds related to the Employee Retention Credit (ERC). The warning follows blatant attempts by promoters to con ineligible people to claim the credit. The IRS highlighted these schemes from promoters who have been blasting ads on radio and the internet touting refunds involving Employee Retention Credits.
- Phishing and Smishing: Taxpayers and tax professionals should be alert to fake communications from those posing as legitimate organizations in the tax and financial community, including the IRS and the states. The IRS initiates most contacts through regular mail and will never initiate contact with taxpayers by email, text or social media regarding a bill or tax refund.
- Online account “help” from third-party scammers: Swindlers pose as a "helpful" third party and offer to help create a taxpayer's IRS online account at IRS.gov. This is an attempt to steal personal information.
- False Fuel Tax Credit claims: The fuel tax credit is meant for off-highway and farming use. This credit is NOT available to most taxpayers.
- Fake Charities: Be wary of “charities” offering help when a crisis or disaster strikes. Charitable donations only count if they go to a qualified tax-exempt organization recognized by the IRS.
- Unscrupulous Tax Return Preparers: Be careful of shady tax professionals and watch for common warning signs, including charging a fee based on the size of the refund. A major red flag or bad sign is when the tax preparer is unwilling to sign the dotted line or include their IRS Preparer Tax Identification Number (PTIN) as required by law.
- Social Media: Social media can circulate inaccurate or misleading tax information. Taxpayers should always remember that if something sounds too good to be true, it probably is.
- Spearphising and Cybersecurity for Tax Professionals: Spearphishing is a tailored phishing attempt to a specific organization or business. A successful spearphishing attack can ultimately steal client data and the tax preparer's identity, allowing the thief to file fraudulent returns
- Offer in Compromise Mills:Offers in Compromise are an important program to help people who can't pay to settle their federal tax debts. But "mills" can aggressively promote Offers in Compromise in misleading ways to people who clearly don't meet the qualifications.
- Schemes Aimed at High-income Filers: Charitable remainder trusts and monetized installment sales.
- Bogus Tax Avoidance Strategies:Micro-captive insurance arrangements and syndicated conservations easements.
- Schemes with International Elements: Offshore accounts and digital assets, Maltese individual retirement arrangements misusing treaty, Puerto Rican, and foreign captive insurance.
HELP STOP FRAUD AND SCAMS:
As part of the Dirty Dozen awareness effort, the IRS encourages people to report individuals who promote improper and abusive tax schemes as well as tax return preparers who deliberately prepare improper returns.
Visit www.irs.gov for more information. Or Dirty Dozen | Internal Revenue Service (irs.gov).