Although the 2024 “Tax Day” is over, tax scams live on. The IRS compiles an annual list of common scams known as the “Dirty Dozen” list.
Read on to learn about the most common tax scams in 2024 to avoid falling victim to them. And, find out how to protect your business and report tax scams to the IRS.
2024 Tax scams to keep on your radar
There is a seemingly endless amount of scams circulating. The IRS strives to raise awareness of common scams during tax season and beyond, including its annual “Dirty Dozen” list, first released in 2002.
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| The IRS will not initiate contact with taxpayers by email, text message, or social media to request personal or financial information. |
So, what’s on the horizon for 2024? Take a look at the following tax scams to look out for this year.
1. Phishing and smishing scams
Phishing and smishing scams are on the rise. Fraudsters and identity thieves impersonating the IRS may try to contact you via email (phishing) and text (smishing) scams.
The goal? To get you to click a suspicious link, hand over personal and financial information, or download a malware file.
According to IRS Commissioner Danny Werfel, scammers use phishing because:
“People can be anxious to get the latest information about their refund or other tax issues, so scammers frequently try using the IRS as a way to trick people.”
Tax professionals and people who run payroll for your business may be especially susceptible to phishing and smishing attempts.
Protect your business: Do not click on any unsolicited communication that claims to be from the IRS. Emails or texts that promise a tax refund or threaten you (e.g., “Your account has been put on hold”) are common phishing and smishing red flags.
2. Employee Retention Credit scams
The Employee Retention Credit (ERC) is a fully refundable tax credit available to eligible employers who kept employees during the COVID-19 pandemic.
However, “ERC mills” began aggressively promoting the ERC to businesses that didn’t qualify. Businesses that incorrectly claimed the ERC could receive penalties, interest, and criminal prosecution.
Look out for ERC scams that urge you to claim the credit for all quarters. Most businesses don’t qualify for the ERC credit for every quarter. Check the ERC eligibility requirements and avoid promoters who say you have nothing to lose.
Have you fallen victim to an ERC scam? You may be able to withdraw your ERC claim if it hasn’t been paid yet or if you received a check and haven’t cashed or deposited it yet.
3. Refund scams
Some scammers try to offer help setting up an IRS.gov Online Account to get access to your tax refund.
Do not give your address, Social Security number (SSN) or Individual Taxpayer Identification number (ITIN), or photo ID to scammers claiming to help you create an IRS Online Account.
Instead, create your own IRS Online Account on the IRS website.
4. Offer in compromise scams
An offer in compromise (OIC) is an IRS program that lets you settle your tax debt for less than what you owe. There are several eligibility requirements to qualify.
OIC mills aggressively promote an offer in compromise to businesses that don’t qualify. These mills promise that your tax debts will disappear if you hire them.
The IRS advises taxpayers to avoid aggressive promoters on the radio and TV who promise to settle your debts inexpensively. Instead, see if you qualify for an OIC by using the IRS’s Offer in Compromise Pre-Qualifier tool.
5. Bad advice on social media scams
The IRS warns against social media scams that post inaccurate or misleading tax information.
Social media scams might encourage you to increase your tax refund through risky actions, such as filling out Form W-2 with false income information.
The IRS warns against social media content producers trying to get your personal information and those spreading inaccurate tax information to get clicks.
Verify that any tax information you receive on social media comes from a reputable professional.
6. Other scams
This is not an all-inclusive list of tax scams. Other scams include spearfishing attacks, fake charity scams, false Fuel Tax Credit claims, and more.
You can check out the full list of scams in the 2024 Dirty Dozen on the IRS website.
How to protect your small business
The IRS recommends that small business owners protect themselves by following the U.S. Federal Trade Commission’s Best Practices.
According to the FTC, you can protect your business by:
- Updating your software
- Securing your files
- Requiring passwords
- Encrypting devices
- Using multi-factor authentication (MFA)
- Securing your router
- Using at least WPA2 encryption
- Requiring strong passwords
- Training all staff
- Having a plan
You can learn more about protecting your business on the FTC’s website.
How to report tax scams
The IRS provides information on how to report tax scams on its website. Contact the appropriate department depending on the scam.
For example, report all phishing scams claiming to be from the IRS to phishing@irs.gov.
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This is not intended as legal advice; for more information, please click here.
