The Internal Revenue Service (IRS) has reported that tax scams are on the rise. These scams have now honed in on small business owners. Tax filing season is a time when scammers especially increase their efforts. These fraudsters don’t cease there, they’re at all times developing new methods to steal your cash and private info year-round. For 2025, it's crucial for business owners to stay informed and proactive in protecting their businesses and personal data from these threats.

Common IRS Scams Targeting Taxpayers

The IRS, along with its Security Summit partners, has dedicated significant effort to educating taxpayers about scams and fraudulent schemes. Through this cooperation we have saved millions of hardworking taxpayers and billions of their tax dollars from refund fraud over the last ten years. For 2025, it’s especially important to stay on guard, as scammers are working hard to employ more complex methods.

Overview of the IRS Dirty Dozen

Each year, the IRS releases its “Dirty Dozen” list of tax scams. This watchlist spotlights the 12 most egregious, prevalent, and risky fiscal threats that Americans and American businesses are exposed to. This list is an important early warning system, identifying the top scams that threaten personal taxpayer and financial data. The “Dirty Dozen” list calls out a variety of scams to be on the lookout for. These are phishing, bad social media guidance, new client scams, bogus IRS Individual Online Account help and ghost tax preparers. The more business owners know how these scams work, the more they can protect themselves and their businesses from fraud.

>Specific Scams to Watch Out For

The IRS has seen an increase in “new client” scams, which are actually spear phishing attacks aimed at tax professionals. Fraudsters are taking their scams to the next level with the help of artificial intelligence (AI). They’ll ship out more and more persuasive phishing emails and other kinds of cons. Identifying these targeted threats is the first step in protecting against them but equally as important.

  • Email Phishing Scams: These scams involve fraudsters sending emails claiming to be from the IRS to steal personal information and submit fraudulent tax returns.
  • Smishing: This involves scammers using text messages with alarming language to trick recipients into clicking bogus links.
  • False Fuel Tax Credit Claims: Taxpayers are misled into believing they are eligible for the Fuel Tax Credit.
  • Bad Social Media Advice: Incorrect tax information on social media can mislead honest taxpayers with bad advice, potentially leading to identity theft and tax problems.

Protecting your business against IRS scams involves both preparation and ongoing vigilance. It’s on small business owners to follow through to protect their Employers Identification Number (EIN) and any other sensitive information.

Key Strategies to Safeguard Your Business from IRS Scams

Here are several essential steps business owners can take to protect themselves:

Essential Steps for Protection

Your business’s EIN is an important part of your business. Think of it as a Social Security number for businesses. Keeping your EIN safe from criminal activity is key to thwarting identity theft and other forms of fraud.

  1. Be Skeptical of Unsolicited Communications: Always be wary of unsolicited emails, phone calls, or text messages claiming to be from the IRS. The IRS typically initiates contact through official letters sent via mail.
  2. Verify Requests Independently: If you receive a suspicious communication, do not click on any links or provide any personal information. Instead, contact the IRS directly through their official website or phone number to verify the request.
  3. Secure Your Online Accounts: Use strong, unique passwords for all your online accounts, including your IRS Individual Online Account and any tax preparation software. Enable two-factor authentication whenever possible.
  4. Educate Your Employees: Ensure that your employees are aware of common IRS scams and know how to identify and report them. Conduct regular training sessions to keep them informed about the latest threats.

Keeping Your EIN Secure and Current

After a natural disaster, criminals take advantage of the chaos and vulnerability of those impacted by the event. One of the most common forms of disaster-related scams is charity fraud. These scams involve phony charities, fraudulent disaster assistance offers, and cons that siphon off relief funds.

  • Safeguard Your EIN: Treat your EIN with the same care as your Social Security number. Do not share it unnecessarily and be cautious about who has access to it.
  • Regularly Review Your Business Credit Report: Check your business credit report regularly for any unauthorized activity or suspicious accounts.
  • Keep Your Business Information Current: Ensure that your business information with the IRS and other relevant agencies is up-to-date. This includes your address, phone number, and authorized representatives.

Awareness of Disaster-Related Scams

Whether it’s identifying an IRS scam or reporting one, your involvement can prevent you and your friends from becoming victims. The IRS encourages people to report individuals who promote improper and abusive tax schemes, as well as tax return preparers who deliberately prepare improper returns.

Identifying Common Disaster Scams

  • Fake Charities: Scammers create fake charities that solicit donations for disaster relief efforts but pocket the money for themselves.
  • Fraudulent Offers of Assistance: These scams involve fraudsters offering assistance with filing insurance claims or applying for disaster relief funds in exchange for a fee or personal information.
  • Schemes Targeting Disaster Relief Funds: Scammers attempt to steal disaster relief funds by submitting fraudulent applications or impersonating victims.

Preventative Measures

If you’ve charged the IRS scam, time is of the essence! Acting quickly will allow you to reduce the impact and protect your identity from being stolen.

  • Verify Charities Before Donating: Research charities thoroughly before making a donation. Check their credentials and ensure they are legitimate organizations.
  • Be Wary of Unsolicited Offers: Be cautious of unsolicited offers of assistance, especially those that require you to pay a fee upfront or provide personal information.
  • Report Suspicious Activity: If you suspect a disaster-related scam, report it to the IRS or other relevant authorities immediately.

Reporting IRS Scams Effectively

The battle against IRS scams is an unending war that demands eternal vigilance and quick maneuvering. Scammers are becoming more advanced and duplicitous by the day. Keep yourself up to date on emerging threats and learn what you can do today to safeguard your business’s and your personal information.

How to Report Suspicious Activity

  • Report Phishing Attempts: If you receive a phishing email or text message claiming to be from the IRS, report it to the IRS through their website.
  • Report Tax Scams: If you encounter a tax scam or suspect someone of promoting improper tax schemes, report it to the IRS using Form 3949-A, Information Referral.
  • Contact the Treasury Inspector General for Tax Administration (TIGTA): TIGTA investigates allegations of misconduct by IRS employees and can be contacted through their website or hotline.

Resources for Victims

Consumer tax scams aren’t just an inconvenience during tax filing season. Fraudsters don’t stop with busy season—they’re working 24/7 all year round, trying to find new ways to exploit vulnerabilities and steal money and sensitive information. And so we must keep that awareness up, all 365 days of the year.

  • File an Identity Theft Affidavit: If your identity has been stolen, file an Identity Theft Affidavit (Form 14039) with the IRS.
  • Contact Your Bank and Credit Card Companies: Notify your bank and credit card companies immediately if you suspect your financial information has been compromised.
  • Monitor Your Credit Report: Regularly monitor your credit report for any unauthorized activity or suspicious accounts.

Ongoing Vigilance Against Scams

So, stay informed, stay proactive and most importantly stay vigilant. In taking these steps, small business owners can protect their businesses and identities from IRS scams in 2025 and years after. The Coalition Against Scam and Scheme Threats (CASST) was formed to fight increasing scams and schemes. As you can see, protecting your business from IRS scams is not a one-time deal.

Importance of Year-Round Awareness

Tax scams are not limited to the filing season. Fraudsters operate year-round, constantly seeking new ways to exploit vulnerabilities and steal money and information. Therefore, it is crucial to maintain a high level of awareness throughout the year.

Tips for Staying Informed

  • Follow the IRS: Stay updated on the latest scam alerts and warnings by following the IRS on social media and subscribing to their email updates.
  • Attend Seminars and Workshops: Attend seminars and workshops on tax scams and identity theft to learn about the latest threats and protection measures.
  • Consult with a Tax Professional: Work with a qualified tax professional who can provide guidance on tax compliance and help you identify and avoid scams.

By staying informed, proactive, and vigilant, small business owners can effectively shield their businesses and identities from IRS scams in 2025 and beyond. The Coalition Against Scam and Scheme Threats (CASST) was launched to combat growing scams and schemes. Remember, protecting your business from IRS scams is an ongoing process that requires constant attention and effort.