Each year, the IRS publishes its “Dirty Dozen” list: the top 12 most prevalent tax scams. Knowing what to watch for can help you avoid trouble — from fake refunds to abusive tax schemes, here’s what the IRS warns taxpayers and preparers about in 2023.

1. Employee Retention Credit (ERC) Scams

Scammers aggressively promote the ERC to people who aren’t eligible, promising inflated refunds. Be wary of advertisers encouraging you to claim it without checking eligibility. Always confirm through IRS or trusted advisors.

2. Phishing & Smishing Tactics

Fake emails, calls, or texts claim to be from the IRS and request personal or financial details. Remember: the IRS never initiates contact via text or social media about a refund or bill.

3. Fraudulent “IRS Online Account Setup” Offers

Some scammers offer to set up your IRS online account—for a fee—and then steal your personal info. Instead, always create your account directly via IRS.gov.

4. False Fuel Tax Credit Claims

This credit is intended for off-road business or agricultural use. Promoters who encourage ordinary taxpayers to claim inflated versions of this credit are likely engaging in fraud.

5. Fake Charities

Scammers create sham charities, especially after disasters, to dupe well-meaning donors. Always verify authenticity through IRS “Exempt Organizations Select Check” or official channels.

6. Unscrupulous Tax Preparers

Avoid preparers who charge by refund size, refuse to sign returns, or won’t provide their PTIN. These warning signs often signal ghost preparers or fraud. Always demand transparency.

7. Misleading Social Media Advice

False or exaggerated claims — e.g. “get a $10,000 refund” — spread fast online. If it sounds too good to be true, it probably is.

8. Spearphishing & Cyber Risks to Professionals

Tax professionals are targets for personalized attacks. Phishing campaigns, malware, or forged emails can lead to client data breach. Always use multi-factor authentication and secure practices.

9. Offer in Compromise Mills

Some purport to guarantee acceptance into IRS settlement programs—even when you don’t qualify. Use the IRS’s Free Pre-Qualifier tool to check eligibility before paying for a service.

10. High-Income Schemes

Abusive strategies like micro-captive insurance or syndicated conservation easements may be offered to high earners. These often inflate deductions and trigger IRS scrutiny.

11. Offshore & Crypto Hiding

Moving assets to foreign accounts or hiding crypto gains may be part of aggressive schemes. The IRS continues to ramp up enforcement in cross-border and crypto reporting.

12. Abusive Tax Avoidance Arrangements

Promoters push complex tax shelters like captive insurance or trust manipulations. These often result in costly audits and penalties when they’re disallowed.

Don’t let scams threaten your tax security. If a deal seems suspicious, seek a reputable tax professional. Contact Grants Pass Tax Service for honest advice and fraud protection.