IRS Warns of 2025 Tax Scams

As an employer, protecting your business from tax fraud is essential for maintaining financial stability and compliance. The Internal Revenue Service recently released its annual “Dirty Dozen” list for 2025, highlighting the most common tax scams threatening businesses and taxpayers nationwide (IR 2025-26, February 27, 2025).

While these fraudulent schemes intensify during tax filing season, vigilance is necessary year-round. Here’s what employers need to know about these potential threats and how to safeguard their organizations.

What Are the Most Dangerous Tax Scams Targeting Employers In 2025?

The IRS has identified twelve significant tax scams this year, many specifically targeting businesses and their payroll operations:

Phishing Tax Scams

Email phishing and text message “smishing” rank among the most serious threats in 2025. Cybercriminals craft convincing messages that impersonate the IRS or financial institutions to extract sensitive payroll and tax information. Remember: the IRS will never initiate contact via email containing links, which often contain malware designed to compromise your company systems.

Social Media Tax Misinformation

Misinformation on social media platforms continues to spread, with misleading advice encouraging improper tax filings. Your employees might encounter posts suggesting fraudulent claims using Form W-2 or incorrectly claiming credits. For reliable tax guidance, employers should consult only official IRS channels or established tax professionals to prevent substantial penalties.

Online Account Setup Fraud

A new scheme involves scammers offering unnecessary “assistance” with creating an IRS Business Online Account, using this as a pretext to harvest company information. The IRS emphasizes that businesses don’t need third-party help to establish these accounts and should exclusively follow official IRS instructions.

Fraudulent Charity Schemes

In the wake of natural disasters and emergencies, fraudulent charities emerge seeking corporate donations. These scams not only divert contributions from legitimate relief efforts but also present significant security risks. Always verify a charity’s credentials through the IRS Tax Exempt Organization Search tool before authorizing company donations.

Which Industry-Specific Tax Scams Should Employers Monitor?

Fuel Tax Credit Fraud

The IRS reports increasing instances of businesses being misled into improperly claiming the Fuel Tax Credit. This specialized credit is specifically designed for off-highway business use and farming—not available for standard business operations or company vehicles used on public highways.

Expired COVID Relief Credit Claims

Many businesses continue submitting claims for expired COVID-era tax credits, particularly Form 7202 (Credits for Sick Leave and Family Leave). These credits were only available for specific periods during 2020 and 2021. Continuing to claim these expired credits could trigger audits and penalties.

Fictitious Self-Employment Tax Credits

Online misinformation about a non-existent “Self-Employment Tax Credit” falsely promises payments to contractors and freelancers. Businesses working with independent contractors should understand these claims are fraudulent and could impact their worker classification compliance.

What Payroll-Related Tax Scams Threaten Business Operations?

Employment Tax Fraud

A concerning trend involves fraudulent Schedule H filings where taxpayers invent fictitious household employees. While this may seem unrelated to business operations, it highlights the importance of proper employment documentation and tax reporting for all worker categories.

Withholding Manipulation Schemes

This sophisticated scam involves filing returns with grossly inflated income and withholding amounts to trigger substantial refunds. For employers, this underscores the importance of accurate payroll processing and proper withholding practices to prevent being implicated in employee tax fraud.

How Can Employers Protect Their Business from Tax Scams?

Tax Settlement Misrepresentation

While the legitimate Offer in Compromise (OIC) program allows qualified taxpayers to settle tax debts for less than the full amount owed, aggressive promoters frequently approach businesses with misleading promises. Use the IRS OIC Pre-Qualifier tool to determine genuine eligibility before proceeding with any tax settlement offers.

Unqualified Tax Preparers

“Ghost” preparers who complete tax returns but refuse to sign them or include their required IRS Preparer Tax Identification Number (PTIN) present significant risks. Businesses should only work with legitimate tax professionals who properly sign all prepared returns and provide their PTIN information.

Data Security Threats

Tax practitioners handling business accounts face specialized “spear phishing” attacks where criminals pose as potential clients to deploy malware that infiltrates professional systems and steals sensitive company tax information. Ensuring your tax professionals maintain strong cybersecurity practices protects your business data.

How Does Tesseon Help Employers Avoid Tax Scams?

As tax scams grow increasingly sophisticated, businesses need comprehensive protection for their payroll and tax compliance processes. Tesseon offers specialized Payroll and Compliance Services designed to shield your business from these evolving threats while streamlining your operations.

Our automated payroll system reduces administrative burden while including built-in compliance safeguards that help prevent your business from becoming vulnerable to many of the schemes on the IRS Dirty Dozen list. With Tesseon’s services, employee and employer payroll taxes are deducted and paid automatically, ensuring accuracy and eliminating opportunities for fraud.

Tesseon’s commitment to legal compliance includes automatically tracking minimum wage and overtime regulations across all states, while our dedicated customer service team provides expert payroll assistance that outperforms larger providers.

By partnering with Tesseon, you’ll gain access to employee self-service features, tailored payroll flexibility, comprehensive analytics, and seamless integrations—all while maintaining the highest standards of tax compliance and security.

For additional information on identifying tax scams, employers can visit the official IRS tax scam and fraud recognition resource.

Stay Protected From Tax Scams With Professional Payroll Support

The IRS encourages reporting suspected tax scams using Form 14242 (Report Suspected Abusive Tax Promotions or Preparers) online or by mail to the IRS Lead Development Center in the Office of Promoter Investigations.

Employers can significantly reduce their risk exposure to these schemes by implementing robust payroll processes and staying informed about current tax scam trends. Tesseon’s comprehensive payroll and compliance solutions provide the protection businesses need in today’s complex tax environment.

Contact Tesseon today to learn how our payroll services can help protect your business from dangerous tax scams while ensuring full compliance with all applicable regulations.