Each year, the Internal Revenue Service (IRS) releases a Dirty Dozen list highlighting twelve tax fraud scams that taxpayers, businesses and tax professionals should be wary of. The 2024 list, which was rolled out in the lead-up to Tax Day, features a wide range of tax schemes.

In addition to warning taxpayers, businesses, and tax professionals about the dangers of these schemes, the IRS encourages individuals to blow the whistle on tax scams and other frauds.

The IRS states that as part of its effort under the Dirty Dozen program, it urges individuals to report those who promote abusive tax practices and tax preparers who intentionally file incorrect returns.

“Taxpayers and tax professionals can also submit this information to the IRS Whistleblower Office, where they may be eligible for an award,” the IRS adds.

Through the IRS Whistleblower Program, qualified whistleblowers are eligible for monetary awards of between 15 to 30% of the funds collected by the IRS in connection with their disclosure.

“Whistleblower information has been an incredibly effective aid to IRS compliance efforts,” IRS Whistleblower Office Director John Hinman stated in honor of National Whistleblower Day 2023. “Since issuing its first award in 2007 through fiscal year 2022, the IRS has paid $1.1 billion in awards to over 2,500 whistleblowers based on the successful collection of $6.6 billion from non-compliant taxpayers.”

The IRS’s 2024 Dirty Dozen tax scams are:

• Bogus tax avoidance strategies, including syndicated conservation easements and micro-captive insurance
• Schemes involving international elements, including Maltese retirement arrangements and digital assets
• Improper art donation deductions, charitable remainder annuity trusts, and monetized installment sales
• Phishing and smishing scams
• Aggressive promotion of questionable claims for the Employee Retention Credit (ERC)
• Scammers attempting to sell or offer help setting up an Online Account on IRS.gov
• Improper Fuel Tax Credits claims
• Offer in compromise (OIC) “mills”
• Fake charities exploiting taxpayer generosity
• Unscrupulous tax preparers, such as “ghost preparers”
• Bad tax information on social media
• Spearphishing attacks

While some of these scams target the information and funds of individual taxpayers, others are abusive tax schemes that individuals or groups use to avoid paying taxes or to obtain a personal or organizational tax benefit. These abusive tax schemes include micro-captive insurance and conservation easement fraud.

The Dirty Dozen list also highlights schemes that seek to evade U.S. taxes by hiding financial assets outside the United States. The IRS points to one scheme that “involves U.S. citizens or residents attempting to avoid U.S. tax by contributing to foreign individual retirement arrangements in Malta or another country.”

Whistleblowers have proven key to exposing U.S. taxpayers who hid assets. For example, former Swiss banker Bradley Birkenfeld blew the whistle on illegal tax shelters run by UBS Bank. Birkenfeld’s whistleblowing led to a $780 million fine levied against UBS, and he received a $104 million whistleblower award, the largest tax whistleblower award in history.

Geoff Schweller also contributed to this article.