An Overview of the IRS’ Dirty Dozen 2022 Tax Scams
Compiled annually, the Dirty Dozen lists a variety of common scams taxpayers may encounter at any time. The IRS warns taxpayers, tax professionals and financial institutions to beware of these scams. This year’s list is divided into five groups. Here’s a look at the top twelve tax scams of 2022.
Potentially abusive arrangements
The 2022 Dirty Dozen begins with four deals that are mispromoted and will likely attract additional agency compliance efforts in the future. These four abusive transactions relate to charitable residual annuity trusts, Maltese individual pension schemes, foreign captive insurance and monetized installment sales.
This IRS reminds taxpayers that criminals are still using the COVID-19 pandemic to steal people’s money and identities with phishing emails, social media posts, phone calls and text messages.
All of these efforts can lead to sensitive personal information being stolen and scammers using it to try to file a fraudulent tax return and harm victims in other ways. Some of the scams people should continue to watch out for include economic impact payment and tax refund scams, unemployment fraud leading to inaccurate 1099-Gs for taxpayers, fake job postings on social media organizations and bogus charities that steal taxpayers’ money.
Offer in Compromise “mills”
OIC offers in compromise or “mills” make outlandish claims, usually in local advertising, about how they can settle someone’s tax debt for pennies on the dollar. Often the reality is that taxpayers pay the OCI factory a fee to get the same deal they could have gotten on their own by working directly with the IRS. These “mills” are a year-round problem, but they tend to be more noticeable just after tax season ends and taxpayers attempt to resolve their tax issues, perhaps after receiving notice. balance due by mail.
Every form of suspicious communication is designed to trick, surprise, or scare someone into responding before they think. Criminals use a variety of means of communication to attract potential victims. The IRS warns taxpayers to be on the lookout for suspicious activity in four common forms of communication: email, social media, phone, and text. Victims are tricked into providing sensitive personal financial information, money or other information. This information can be used to file false tax returns and access financial accounts, among other schemes.
Spear phishing attacks
Spear-phishing scams target individuals or groups. Criminals attempt to steal customer data and the identity of tax preparers to file fraudulent tax returns for refunds. Spear phishing can be adapted to attack any type of business or organization, so everyone should be wary of emails asking for financial or personal information.
A recent spear phishing email used the IRS logo and a variety of subject lines such as “Action Required: Your account has now been put on hold” to steal software readiness credentials tax professionals. The scam email contains a link that, if clicked, will send users to a website displaying the logos of several popular tax preparation software providers. Clicking on any of these logos will display a request for tax preparer account credentials. The IRS warns tax professionals not to respond or take any of the actions described in the email. The IRS has observed similar spear phishing emails claiming to be from “tax preparation app providers.”
The list is not a legal document or a literal list of agency law enforcement priorities. It is designed to educate a variety of audiences who may not always be aware of developments involving tax administration.