In this year’s Wealth Planning Trends, we remind advisors and clients of what they truly control from a tax standpoint: Income and deductions. Our discussion of deductions is a great reason to review the Internal Revenue Service’s (IRS) “Dirty Dozen” list for 2025.

No, it’s not a remake of the 1967 WWII film classic. This Dirty Dozen is published annually by the IRS and covers 12 common scams and schemes used by fraudsters to steal money, personal information, and data from taxpayers. The IRS makes it clear that this is not a legal document or a listing of enforcement priorities; rather, it is their effort to educate and raise awareness among tax professionals and the tax-paying public.

In a year that saw the downsizing of nearly every department of the federal government (including the IRS), bad actors may feel even more emboldened as they view this as an opportunity to take advantage of the potential for reduced oversight and enforcement. Financial professionals and their clients are advised to educate themselves and remain vigilant throughout the year, but especially during tax season.

With that in mind, we’ve put together a summary of the IRS’s Dirty Dozen – along with tips on how to avoid these common scams – for advisors and clients to reference heading into tax season.

1. Phishing and Smishing scams. Email (phishing) and text (smishing) scams are fake communications from bad actors posing as legitimate organizations in the tax and financial community. Some offer inflated refunds while others threaten legal action for tax fraud. To avoid falling victim to these scams, always look for a valid source address and never click on any unsolicited communication claiming to be from the IRS.
2. Bad social media advice. Social media provides a high-visibility platform for contributors to circulate wildly inaccurate tax advice. This may lead honest taxpayers to be the victim of identity theft or tax reporting problems. Taxpayers are urged to follow only verified sources of trusted information, such as the IRS and established tax professionals.
3. IRS individual online account “help” from scammers. Taxpayers are encouraged to set up an Individual Online Account at IRS.gov. This account provides taxpayers with valuable personal tax information. Under the guise of an “offer to help,” third-party swindlers will try to steal a taxpayer’s personal information and then submit fraudulent tax returns to get a big refund.No special assistance is needed to establish an account. Simply visit IRS.gov/payments, click on “Individual online account”, and follow the approved authentication process.
4. Fake charities. New charities pop up quickly after natural disasters strike. Scammers set up these fake organizations to obtain money and personal information by taking advantage of the public’s sympathy and generosity. If you have any doubts as to the authenticity of a nonprofit organization, take a moment to confirm the tax-exempt status of those seeking donations by checking the Tax Exempt Organization Search tool on IRS.gov.
5. False fuel tax credit claims. The Fuel Tax Credit is meant for off-highway business and farming use. It is not available to most taxpayers despite what is claimed by some tax preparers and tax-reduction strategies promoters. It is wise to confirm qualification for this credit with an experienced tax professional.
6. Credits for sick leave and family leave. This credit no longer exists; it was available for self-employed individuals for the 2020 and 2021 income-tax years. Beware of any offers referencing these credits, as they are extremely likely to be extended on behalf of fraudsters.
7. The bogus self-employment tax credit. This supposed credit is loosely based on the much more limited and technical “Credits for Sick Leave and Family Leave.” But the “self-employment tax credit” does not exist. The IRS is closely reviewing returns showing this credit, so avoid any recommendations to claim it, and be prepared for full tax return scrutiny.
8. Improper household employment taxes. In this scam, taxpayers are encouraged to file Schedule H (Form 1040) listing fictional household employees and claim a refund on sick and family medical leave wages that were never paid to people that never existed. Simply put, this is tax fraud.
9. Overstated withholding scam. This is a recent scheme circulating on social media encouraging people to fill out Form W-2, Form 1099, or other forms with false income and withholding information. Scam artists then instruct people to file the bogus tax return electronically in hopes of getting a substantial refund due to the large amount of fraudulent withholding. Tax reporting and collection is not a game; this is wrong even if it somehow slides through the IRS review process.
10. Misleading “offers in compromise”. The Offers in Compromise (OIC) program helps people settle their federal tax debts when they are unable to pay in full. But disreputable businesses can aggressively promote OICs in misleading ways to people who are desperate to address their tax obligations but clearly don’t meet the qualifications. A taxpayer can check their eligibility for free using the Offer in Compromise Pre-Qualifier tool on IRS.gov.
11. “Ghost” tax return preparers. Beware of tax preparers with whom you are unfamiliar or know only based upon promoted strategies. Be particularly careful when dealing with tax preparers who are unwilling to sign the return and include their Preparer Tax Identification Number (which is required by law), known as “ghost preparers”. And, of course, never sign a blank or incomplete return.
12. Phony new client scams. These scams involved “spear-phishing” attempts to target tax professionals. Scam artists impersonate new, potential clients to trick tax professionals into responding to their emails. The scammer then sends a malicious attachment that can compromise the preparer’s computer system and allow the attacker to access sensitive client information. Look out for any suspicious requests or unusual behavior before sharing any sensitive information or responding to an email.

Technology has improved our lives immensely, but not without a cost. Today’s fraudsters have access to a quickly evolving set of tools to help them perpetrate increasingly sophisticated scams.

Be vigilant and protective when sharing personal and financial information with anyone. To report an abusive tax scheme or tax return preparer, use the online Form 14242 (Report Suspected Abusive Tax Promotions or Preparers) on IRS.gov, or print and complete the PDF version of the form and mail or fax it, along with any supporting material, to the IRS Lead Development Center in the Office of Promoter Investigations. Taxpayers and tax practitioners may also send the information to the IRS Whistleblower Office for a possible monetary award.

Caveat Taxpayer!

The information contained herein is for educational purposes only and should not be construed as financial, legal or tax advice. Circumstances may change over time so it may be appropriate to evaluate strategy with the assistance of a financial professional. Federal and state laws and regulations are complex and subject to change. Laws of a particular state or laws that may be applicable to a particular situation may have an impact on the applicability, accuracy, or completeness of the information provided. Janus Henderson does not have information related to and does not review or verify particular financial or tax situations, and is not liable for use of, or any position taken in reliance on, such information.