Scammers are constantly changing their playbooks to try and stay ahead of the authorities. That is why the IRS annually updates its “Dirty Dozen Tax Scam” list. This week we’ll explore the latest article from the IRS on this year’s tax scams then we’ll check out an article from Financial Advisor Magazine that involve questionable tax practitioners and charitable remainder annuity trusts.

Don’t miss out on this week’s listener question because chances are, you have had this question as well. Share on X

Outline of This Episode

  • [2:22] What the IRS has to say about the dirty dozen in 2023
  • [9:54] Tax scams that target the wealthy
  • [14:02] On making larger withdrawals in your 60s and lesser withdrawals later on
We often only think of these scams during tax times but, the scams can occur at any time, not just during tax season. Share on X

Be aware of these Dirty Dozen Tax Scams

The IRS’s most recent list of the “Dirty Dozen Tax Scams” cautions taxpayers, businesses, and tax professionals to remain vigilant throughout the year. We often only think of these scams during tax times but, the scams can occur at any time, not just during tax season.

  1. Employee retention credit claims: Some scammers promote large refunds related to the Employee Retention Credit and con ineligible individuals into claiming the credit. Then they collect personal information and conduct identity theft.
  2. Phishing and smishing: You’ve probably heard of phishing scams, but smishing? That’s new to me. Taxpayers and professionals should be wary of unsolicited emails and texts that pose as legitimate tax and financial organizations, such as the IRS. These queries trick victims into providing personal and financial information.
  3. Online account help from third-party scammers: In this scam, fraudsters pose as helpful third parties offering to create taxpayers’ IRS online accounts, but their intention is to steal personal information. It is essential that you establish your own accounts through
  4. False fuel tax credit claims: Unscrupulous tax preparers and promoters entice unsuspecting taxpayers to falsely claim the fuel tax credit which is only available for off-highway business and farming use.
  5. Fake charities: Scammers set up fake charities, particularly after crises or natural disasters, to exploit people’s generosity and obtain money and personal information for identity theft. Make sure your charitable donations go to qualified tax-exempt organizations.
  6. Unscrupulous tax return preparers: Taxpayers should be cautious of tax professionals who charge fees based on the refund amount or refuse to sign or include their IRS Preparer Tax Identification Number (PTIN) on the tax return.
  7. Fraudulent form filing and bad advice on social media: Misleading tax information circulates on social media, which encourages people to submit false information to claim refunds. Taxpayers should be wary of dubious advice and remember that if it sounds too good to be true, it probably is.
  8. Spearphishing and cybersecurity for tax professionals: Tax professionals need to be careful of spearphishing attempts which can lead to data breaches and the theft of client data and identities.
  9. Offer in Compromise mills: Unscrupulous promoters aggressively market Offers in Compromise in misleading ways, costing taxpayers thousands of dollars. Taxpayers can use the IRS Offer in Compromise Pre-Qualifier tool to check their eligibility for free.
  10. Schemes aimed at high-income filers: The list includes various schemes like misusing Charitable Remainder Trusts, monetized installment sales, and abusive micro-captive insurance arrangements, all aimed at reducing or eliminating tax obligations.
  11. Bogus tax avoidance strategies: These strategies involve abusive arrangements such as syndicated conservation easements, which generate inflated tax deductions.
  12. Schemes with international elements: The IRS is focused on scrutinizing attempts to hide assets in offshore accounts and digital assets like cryptocurrency. Other schemes involve misusing tax treaties and participating in foreign captive insurance arrangements.
It is crucial to rely on reputable tax professionals and exercise caution when dealing with potential scams. Share on X

It is important to remember that the IRS will challenge any tax benefits stemming from these schemes and impose penalties on those who use them. This is why it is crucial to rely on reputable tax professionals and exercise caution when dealing with potential scams.

Resources & People Mentioned

Connect with Benjamin Brandt

Subscribe to Retirement Starts Today on

Apple Podcasts, Stitcher, TuneIn, Podbean, Player FM, iHeart, or Spotify