In April 2023, the IRS sent out a news release regarding the 2023 Dirty Dozen recap list of tax scams with the goal to remind taxpayers and tax professionals to beware of schemes. Though fraudsters strike more frequently during filing season, schemes may arise at any time throughout the year.
The IRS is warning the public against sharing personal information over the phone, email, and social media, since these fraudsters specialize in identity theft and the stealing of funds and data.
The Dirty Dozen campaign lists out various abusive tax schemes that aim to catch taxpayers and businesses unaware. The list includes:
- Employee Retention Credit (ERC) claims: Scammers may target ineligible people to promote large refunds related to ERC. These false statements are often meant to gather an individual’s personal information.
- Phishing, smishing, and spearphishing: Scammers may communicate under the false pretense of the IRS or other legitimate financial organizations. They may send texts (smishing) or emails (phishing) in an effort to steal their target’s personal information. Spearphishing scammers are more precise in their approach since they target specific businesses which can lead to larger data breaches.
- Online account help from third-party scammers: Scammers may pretend to be “helpful” third parties that guide users on how to create an IRS online account. Though you actually don’t need help creating an official IRS account, swindlers will use this tactic to gather sensitive information.
- False Fuel Tax Credit claims: These tax credits are mainly reserved for business and farming use. However, tax return promoters may convince taxpayers to inflate their refundable credits.
- Fake charities: Scammers create false charitable organizations for monetary gain or to seek out personal information.
- Suspicious tax return preparers: Though many tax preparers offer a legitimate service, beware of those that are unwilling to sign the prepared tax returns.
- Social media: Beware of false information regarding tax information filing that is often circulated on social media.
- Offer in Compromise mills: “Offers in Compromise” make up a program to help those who can’t afford federal tax debts. However, “mills” may promote the program to those who don’t qualify for it, costing them thousands of dollars.
- Offshore accounts and digital assets: Individuals may attempt to hide assets in offshore accounts or through cryptocurrency. Asset protection professionals and promoters may also lure individuals to use these tactics by inaccurately claiming that the IRS won’t be able to identify the hidden goods.
- For more information, you can visit IRS.gov.
Blowing the Whistle on IRS-Related Fraud and Scams
- As part of the Dirty Dozen campaign, the IRS encourages individuals to report any abusive tax schemes and suspicious tax return preparers or promoters.
- Taxpayers and tax practitioners may report violations to the IRS Whistleblower Office and may be eligible to earn significant monetary awards.
- Individuals are encouraged to mail or fax a completed Form 14242, Report Suspected Abusive Tax Promotions or Preparers to IRS Lead Development Center in the Office of Promoter Investigations.
Whistleblowers seeking legal advice may contact Kohn, Kohn & Colapinto for a consultation.
