New Tax Industry Task Force Aims to Crack Down on Scams

• 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, as well as federal, state, and industry tax systems.

“Across the spectrum of the tax system, we’ve seen a rising tide of scams and schemes that try to exploit taxpayers and find gaps in government and industry defenses,” Werfel said in a statement. “This new collaborative approach will allow the private and public sectors to throw our combined weight against this threat. We will do more to work closely together, share information faster, respond quickly to threats, and quickly alert the public to new and emerging threats. Our goal is to have a mass effect on this expanding problem that’s spread on social media and through bad actors.”

In addition to the IRS, some of the other CASST participants include:

• State tax agencies represented by the Federation of Tax Administrators;
• Tax software companies, such as Intuit, H&R Block, Jackson Hewitt, Liberty Tax, and TaxSlayer;
• National Association of Computerized Tax Processors;
• AICPA;
• American Coalition for Taxpayer Rights;
• National Association of Enrolled Agents;
• National Association of Tax Professionals;
• National Society of Accountants;
• National Society of Tax Professionals;
• Padgett; and
• Thomson Reuters.

In all, more than 60 different groups from the private sector have signed on to the initiative, either individually or as part of a group, according to the IRS.

“The FTA membership is dedicated to protecting taxpayers from fraudulent attacks on the country’s tax ecosystem,” said Sharonne Bonardi, executive director of the Federation of Tax Administrators. “We are committed to continuing our collaborative efforts by working with the IRS, industry, and other stakeholders to implement strategies that allow for proactive detection, prevention, and mitigation of scams and schemes deployed by bad actors intending to defraud tax agencies.”

National Association of Tax Professionals CEO Scott Artman added, “Protecting taxpayers from scams is not just a goal but a responsibility we share as key stakeholders in the tax ecosystem. This collaboration brings together the best resources and expertise from both public and private sectors, enhancing our ability to safeguard the integrity of our tax system and the financial stability of all Americans. We are proud to join state agencies, the IRS, and our industry partners in this vital initiative.”

The new coalition is an outgrowth of the Security Summit effort, and while the new CASST won’t replace the Summit, the scams coalition will be closely modeled on it.

The Security Summit was launched in 2015 by the same groups to stem the growth in tax-related identity theft. The combined effort has improved information sharing between the groups, identified common approaches to combat tax-related identity theft, improved internal tax system defenses, and conducted extensive public awareness campaigns for taxpayers and tax professionals. While tax-related identity theft remains a concern, the improved protections have protected millions of taxpayers and prevented billions of dollars of fraudulent payments, the IRS said.

The purpose of the CASST, according to the IRS, is “to better protect taxpayers from falling prey to unscrupulous actors by leveraging multilateral relationships across the tax ecosystem to minimize the filing of fraudulent tax returns.”

“CERCA is pleased to work with the IRS and the states to combat the proliferation of ‘scams and schemes’ that are victimizing millions of Americans,” said Shannon Bond, chair of the Council for Electronic Revenue Communication Advancement, which represents companies in the tax software and preparation industries, as well as financial service groups and others in the tax community. “Continuing our long partnership with the IRS, CERCA stands shoulder to shoulder with both the federal government and the states to reduce first-party fraud, which threatens the viability of tax systems and imperils vulnerable taxpayers.”

During the past tax season, there has been increased activity involving a variety of scams and schemes harming taxpayers, including the Fuel Tax Credit, household employment taxes, and the Sick and Family Leave Credit. The IRS has seen hundreds of thousands of dubious claims come in 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.

Numerous other scams and schemes have been circulating on social media and are highlighted through efforts, including the annual IRS Dirty Dozen list and alerts from the Security Summit partners. The new approach will increase collaborative efforts to raise awareness and education about schemes—not just during tax season but throughout the year, the IRS said.

With the new scam and scheme initiatives, the IRS, states, and the private sector will work to put in place new protections by filing season 2025.

“The combined effort is particularly important because the group has seen instances where scammers look for weak points in government systems and the private sector to exploit,” the IRS said. “The combined effort will improve defenses across both the private and public sector with a goal of making it more difficult for scammers to slip improper or false tax returns through the system.

“The group will also work to make long-term structural changes to fundamentally improve the ability to identify and stop scams,” the agency continued. “This includes working to improve EFIN and PTIN validation and new steps to combat ‘ghost preparers,’ who prepare tax returns for a fee and do not in any way sign a tax return or disclose their role on the tax return as the preparer. In many cases, these are inflated tax refunds that lead to millions in revenue loss and add risk for taxpayers who file potentially improper claims with only the individual’s name associated with the tax return.”