IRS adds AI abuse, capital gains fraud to ‘dirty dozen’ scam list

The IRS’s annual “dirty dozen” list of tax frauds and scams now includes artificial intelligence abuses and fraudulent claims involving undistributed long-term capital gains.

Since at least 2002, the IRS has published a list warning of 12 illegal tax scams intended to defraud the IRS or steal money and data from unsuspecting taxpayers. Some schemes, such as impersonating the IRS and demanding falsified tax bills, make the list virtually every year.

This year’s warnings list for the first time AI as a threat to the nation’s tax payment and collection system, not only because of its ability to impersonate the IRS but also because of its information-gathering abilities.

Also making its first appearance on the list are fraudulent claims involving undistributed long-term capital gains. The IRS said it has identified schemes in which fraudulent tax promoters overstate or falsify Form 2439 claims, “including claims tied to organizations that are not legitimate investment funds or real estate trusts.” Learn more.