Key Takeaways:
- Watch for phishing scams, fake tax preparers, and misleading social media advice that can lead to fraud, identity theft, and IRS penalties.
- The IRS never contacts taxpayers through email, text, or social media — avoid clicking on suspicious links or sharing personal information.
- Work with a trusted CPA to navigate tax filings, prevent fraud, and resolve IRS issues while maximizing legitimate deductions and credits.
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Tax season brings the challenge of filing returns and the growing risk of fraud targeting individuals and businesses. Each year, criminals refine their tactics to steal personal and financial data — often posing as legitimate entities like the IRS or tax professionals.
The IRS Dirty Dozen list highlights the most common tax scams of the year, helping taxpayers recognize and avoid financial traps. Falling for one of these schemes can result in identity theft, fraudulent tax filings, penalties, and unexpected liabilities.
MGO helps individuals and businesses navigate tax complexities while offering guidance on fraud awareness and prevention. Below, we break down some of the top tax scams of 2025 identified by the IRS and how you can safeguard your finances.
1. Phishing and Smishing Scams
How the scam works: Cybercriminals pose as the IRS, financial institutions, or tax professionals through fraudulent emails (phishing) and text messages (smishing) to steal Social Security numbers, banking details, and other sensitive financial information. These scams often create a sense of urgency, claiming that your tax refund is at risk or that you owe money to the IRS.
How to stay safe:
- The IRS does not start contact with taxpayers through email, text, or social media to request personal or financial details.
- Never click links, open attachments, or respond to messages from unknown sources.
- Reporting phishing attempts to phishing@irs.gov will help prevent others from falling victim.
2. Social Media Tax Misinformation
How the scam works: Misinformation about tax credits and filing tactics spreads rapidly on social media platforms like TikTok, Twitter, and Facebook. Fraudsters encourage users to send false deductions, inflate income, or improperly claim credits to increase refunds. Falling for these schemes can result in audits, penalties, or even legal consequences.
How to stay safe:
- Only take tax advice from certified professionals or official IRS resources.
- Be cautious of viral tax “hacks” or methods promising unusually large refunds.
- If unsure about a tax strategy, consult a CPA before filing.
3. Fake IRS Online Account Assistance
How the scam works: Scammers posing as IRS representatives or tax preparers offer to help set up an IRS.gov online account. They use this opportunity to steal login credentials and file fraudulent tax returns in the victim’s name.
How to stay safe:
- Create and manage your IRS online account independently at IRS.gov.
- Never share login details with unverified individuals or third parties.
- If you suspect unauthorized access to your IRS account, report it at once.
4. Fraudulent Charities
How the scam works: Scammers exploit natural disasters, economic hardships, or trending causes by setting up fake charities that ask for donations. These fraudulent organizations steal money and personal information, leaving taxpayers at risk of financial loss.
How to stay safe:
- Verify charities through the IRS tax-exempt organization search tool before donating.
- Avoid making donations via wire transfers, gift cards, or cryptocurrency.
- Keep detailed donation records for tax reporting purposes.
5. False Fuel Tax Credit Claims
How the scam works: The fuel tax credit is intended for businesses that use fuel for off-highway purposes, such as farming and construction. However, some promoters mislead taxpayers into believing they qualify — leading to improper claims and IRS penalties.
How to stay safe:
- Confirm your eligibility for the credit with a tax professional before filing.
- Be cautious of tax preparers promising significant refunds based on fuel tax credits.
- Filing a false claim can trigger an audit and result in fines or repayment demands.
6. Ghost Tax Preparers
How the scam works: Ghost tax preparers refuse to sign returns, often submitting fraudulent claims without the taxpayer’s knowledge. They typically promise inflated refunds and charge fees based on refund amounts, leaving the taxpayer accountable for inaccuracies.
How to stay safe:
- Only use tax preparers who provide a preparer tax identification number (PTIN) and sign the return.
- Be cautious of preparers who request you to sign a blank or incomplete tax return, as this could be called fraudulent activity.
- Request a copy of your filed return and review all details before submission.
7. Spear Phishing and Business Scams
How the scam works: Cybercriminals target businesses and tax professionals with spear phishing scams, sending highly customized emails impersonating vendors, employees, or clients. These emails have malicious links or requests for sensitive financial information.
How to stay safe:
- Always verify the sender’s email address and be cautious of unexpected requests for financial details.
- Implement multi-factor authentication for financial and business accounts.
- Educate employees on finding phishing emails and encourage them to report any suspicious activity at once.
8. Misleading “Offers in Compromise”
How the scam works: Some companies aggressively market “tax debt relief” services, falsely claiming they can settle tax debt for “pennies on the dollar” through the IRS Offer in Compromise Program. Many taxpayers do not qualify for this relief, yet these firms charge hefty fees upfront without delivering results.
How to stay safe:
- Use the IRS offer in compromise pre-qualifier tool to decide eligibility before seeking outside help.
- Be wary of any company that guarantees tax debt forgiveness without reviewing your financial situation.
- Work with a licensed CPA or tax professional for legitimate tax resolution strategies.
Protect Your Finances
Tax fraud is constantly evolving and falling victim to a scam can lead to financial loss, identity theft, and unnecessary stress. Facing these risks alone can be overwhelming, but you don’t have to navigate tax season on your own.
At MGO, we do more than file tax returns — we help you avoid fraud and protect your financial security. Our tax and fraud prevention services include:
- Fraud risk assessments: We help your business detect and prevent financial fraud.
- Tax compliance and planning: Our team confirms your tax filings meet IRS guidelines while maximizing benefits.
- Audit representation and resolution: If the IRS contacts you, we help in resolving issues efficiently.
Whether you’re an individual taxpayer or a business owner, MGO provides the insights and support to help you make informed decisions, avoid fraudulent schemes, and maintain compliance with IRS regulations. Our team is dedicated to keeping you aware of emerging tax threats and helping you take proactive steps to safeguard your financial future. Connect with our Tax team today to find out how we can support you.
