The IRS, state tax agencies and tax industry representatives last week announced a new joint effort to combat the growth in tax scams. Members of the Coalition Against Scam and Scheme Threats will work to expand outreach and education about emerging scams, develop new approaches to identify potentially fraudulent returns at the point of filing and create infrastructure improvements to protect taxpayers and tax schemes, according to an IRS statement.
The IRS reported an increase in fraudulent activity during the most recent tax season, including scams involving the Fuel Tax Credit, household employment taxes and the Sick and Family Leave Credit. The agency said has seen hundreds of thousands of dubious claims “where it appears taxpayers are claiming credits for which they are not eligible, leading to refunds being delayed and the need for taxpayers to show they have legitimate documentation to support these claims.”
The coalition plans to have new scam protections in place by the 2025 tax filing season. It also will work “to make long-term structural changes to improve the ability to identify and stop scams,” such as improvements to EFIN and PTIN validation, and new steps to combat “ghost preparers” who prepare tax returns for a fee and do not sign a tax return or disclose their role.
