Each year the Internal Revenue Service issues a list of the twelve most commonly seen tax schemes. The list, called the “Dirty Dozen” is published to alert taxpayers, tax professionals, and financial institutions of prevalent scams. 

“With the global pandemic this past year, scam artists sadly preyed on those in great need.  They exploited people’s fear, the uncertainty of the future, and need for assistance to obtain personally-identifying information and funds from unsuspected individuals,” said Darrell J. Waldon, Acting Special Agent in Charge of the IRS-CI Washington DC Field Office.  “We hope to prevent additional individuals from falling victim to these scams by getting this information out and making people aware of potential cons they may run across.”

This year’s Dirty Dozen was split into categories and issued by the IRS in four separate releases.  Below are summaries of the most prevalent schemes with links to the news releases issued which provide additional information from IRS.gov.

Pandemic-Related Scams

  • Economic Impact Payment theft          
  • Unemployment fraud leading to inaccurate taxpayer 1099-Gs

To help taxpayers avoid identity theft, the IRS this year made its Identity Protection PIN (IP PIN) program available to all taxpayers. Previously it was available only to victims of ID theft or taxpayers in certain states.

Personal Information Cons

  • Tax-related phishing scams                   
  • Impersonator phone calls/vishing
  • Social media scams                                 
  • Ransomware

The IRS will never call and threaten you for immediate payment and will not demand specific payment methods such as prepaid debit card, gift card, or wire transfer.  The IRS will never request personal or financial information by e-mail, text or social media. If you are contacted in this manner, do not give out any information and do not engage in communication.

Ruses Focusing on Unsuspecting Victims

  • Fake charities                                            
  • Immigrant/senior fraud
  • Offer in Compromise “mills”                    
  • Unscrupulous tax return preparers
  • Unemployment insurance fraud

Schemes that Persuade Taxpayers into Unscrupulous Actions

  • Syndicated conservation easements      
  • Potentially abusive use of the US-Malta tax treaty
  • Abusive micro-captive arrangements.    
  • Improper monetized installment sales
  • Improper claims of business credits          

If you are aware of any abusive tax scam or believe you have been the victim of one of these scams, please report it to the IRS.  Information on how to report tax crimes can be found on IRS.gov.

David M. Higgins II, Publisher/Editor

David M. Higgins was born in Baltimore and grew up in Southern Maryland. He has had a passion for journalism since high school. After spending many years in the Hospitality Industry he began working in...

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