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6 Tax Scams to Beware Ahead of Tax Day 2024

In 2024, just like every year, we remind you: As you prepare to file your annual returns to the IRS, keep your eyes open for tax scams.

Because they’re everywhere.

Scammers are always looking for an opportunity to take advantage of people thrown into high-stress, high-stakes situations. And what situation fits the bill more than tax time, where people are facing a deadline to send in a complicated financial report to the federal government — and in many cases, results in the return of hundreds or thousands of dollars?

The IRS is well aware of this, of course. So throughout the year, it provides guidance on tax scams that Americans need to watch out for — and how to tell if someone’s trying to fleece them.

Read on as we explore five such scams that could pick up steam as we approach Tax Day 2024.

Text Scams

A long text pops up on your phone. It’s supposedly from the IRS, warning you that you haven’t filled out certain forms, owe back taxes or are in some other way in the agency’s crosshairs. They might even tell you their name and badge number, and let you know that you owe some sort of large fine should you not click on a link or respond to a certain phone number immediately.

They’re hoping you panic and respond without thinking. But if you ever receive a message like this, stop and take a breath.

It’s fake.

The IRS almost exclusively works via U.S. mail, especially at the onset. In fact, the IRS explicitly states that, with the exception of IRS Secure Access, it “does not use text messages to discuss personal tax issues, such as those involving bills or refunds.” It won’t message you on Facebook, Twitter or other social media accounts, either, so the same advice applies. Should you ever get a message like this, take a screenshot and send it to phishing@irs.gov.

By the way, the same goes for the phone: The IRS will never call you up and threaten you for nonpayment or other transgressions.

Fake Tax Advice on Social Media

One of the fastest-growing sources of bad and malicious tax advice is social media.

“There are many ways to get good tax information, including from a trusted tax professional, tax software and IRS.gov. But people should be incredibly wary about following advice being shared on social media,” says IRS Commissioner Danny Werfel. “The IRS continues to see a lot of inaccurate information that could get well-meaning taxpayers in trouble.”

The IRS provides a pair of examples of bad advice circulating on social media recently:

  • Form 8944 Fraud: Social media posters are saying that taxpayers can use Form 8944, Preparer e-file Hardship Waiver Request, to receive an IRS refund even if the taxpayer has a balance due. This isn’t true. In fact, regular filers shouldn’t even be using Form 8944 — it’s for tax professionals requesting a waiver to file a paper return. Intentionally filing this form with false information could result in civil and criminal penalties.
  • Form W-2 Fraud: A malicious piece of advice making the social media rounds is to use tax software to manually fill out a W-2, Wage and Tax Statement, with false income information. Specifically, filers are urged to exaggerate wages and withholding, and even list fake employers, to get a larger refund than they would otherwise. Again, knowingly filing this form with false info could result in significant civil and criminal penalties.

Schemes Aimed at High Income Filers

The IRS is also warning of a pair of schemes specifically designed to ensnare wealthy taxpayers. These two scams revolve around:

  • Charitable Remainder Annuity Trust (CRAT): CRATs are trusts that allow people to donate assets to charity and draw income, whether that’s over a specified time period or for the rest of their lives. However, they are occasionally misused to illegally reduce taxable income or capital gains on the sale of property by (wrongly) claiming transferring property to a CRAT results in an increase in basis to fair market value.
  • Monetized Installment Sales: In this scheme, promoters identify taxpayers looking to defer gain recognition on property sales and arrange purported monetized installment sales for a fee. In these transactions, an intermediary buys appreciated property from a seller, who receives an installment note. Payments usually cover only interest, with principal settled at the term’s end. Sellers receive the majority of proceeds, but the gain recognition on the property is improperly postponed until the final installment note payment, often years later.


Other popular tax scams involve people impersonating the IRS via email — a tactic called phishing.

Like with text/phone scams, someone will pretend like they’re from the IRS in hopes that you’ll do something they want you to do. Usually, this will involve getting you to click on a link to a website where you give up personal and/or banking information, though sometimes, the link will install malware on your computer, allowing the scammers to hack your email or even hold your computer hostage.

The message they’ll try to trick you with varies. Yes, in some cases, they’ll try the “hard sell” of convincing you that you’re late on your filing or payment. But sometimes, it might be more subtle, like asking you to verify information or fill out a new tax form.

Again, remember: The IRS typically communicates through regular mail, not email.

OIC Mills

One scam that’s more prevalent right after filing season, but that you still might come across before Tax Day, is the “OIC mill.”

Some firms brag that they can help you settle your debt with the IRS for “pennies on the dollar.” They can achieve this via a very real method called an Offer in Compromise (OIC).

But few people actually qualify for OICs. And worse? “The reality usually is that taxpayers pay the OIC mill a fee to get the same deal they could have gotten on their own by working directly with the IRS,” the IRS says.

In fact, you can actually to see whether you’re qualified, for free, at the Offer in Compromise Pre-Qualifier Tool.

Fraudulent Tax Preparers

One of the ways many people try to avoid tax scams is to entrust their sensitive financial documents to a professional tax preparer.

It’s a smart move — but sadly, it’s a move that some scammers still manage to take advantage of. Some try to get your attention by promising massive refunds or charging fees that vary based on the size of the refund, then aggressively (and dishonestly) claim numerous tax credits and deductions you might not be qualified to receive. Others — dubbed “ghost preparers” — are fake tax preparers, who might get your return routed to their bank account or steal your personal information.

One of the best ways to protect yourself: Make sure your preparer signs and includes their Preparer Tax Identification Number (PTIN).

“Not signing a return is a red flag that the paid preparer may be looking to make a quick profit,” the IRS says. “Taxpayers should avoid these unethical ‘ghost’ tax return preparers.”

The IRS also advises you to check the Better Business Bureau for more information about the preparer, or check professional groups, like the State Board of Accountancy for CPAs, or the State Bar Association for attorneys.

This IRS page on tax return preparer credentials and qualifications can help you identify a legitimate prepare. And we provide other tips for selecting a tax return preparer here.

Our advice? Call us! McManamon & Co. offers expert tax services to small and midsize businesses, from basic filings to payroll taxes to compliance services and more. And while we’re happy to provide you with all of our credentials so you know we’re the real deal, you can also visit the IRS’s suggested resource sites to put your mind at ease.

Let us get you through the tax season scam-free. Call McManamon at 440.892.8900 or contact us online today.

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