Protecting Your Small Business: IRS 2025 Dirty Dozen Tax Scams Alert

As a small business owner, staying informed about potential tax scams is crucial for safeguarding your financial health and maintaining compliance. The Internal Revenue Service (IRS) has released its annual "Dirty Dozen" list of tax scams for 2025, highlighting schemes that pose significant threats to taxpayers, businesses, and tax professionals. Let's dive into these scams and provide actionable tips to protect your small business.

1. Beware of Bad Social Media Advice

In 2025, the IRS has noted a concerning trend of inaccurate tax information circulating on social media platforms.

Tips for Small Business Owners:

- Verify tax advice from credible sources like the official IRS website or licensed tax professionals.

- Be skeptical of "too good to be true" tax strategies shared on social media.

- Remember that following fraudulent advice can lead to severe penalties and legal consequences.

2. Watch Out for IRS Individual Online Account "Help" Scams

Scammers are impersonating the IRS through fake emails, texts, and online messages, often claiming issues with your account or promising refunds.

Tips for Small Business Owners:

- Never click on links or download attachments from unsolicited emails claiming to be from the IRS.

- Remember that the IRS initiates contact through official mail, not email, text, or social media.

- If in doubt, directly contact the IRS using official channels listed on IRS.gov.

3. Scrutinize Charitable Donations

Fake charities continue to be a prevalent scam, exploiting the generosity of individuals and businesses alike.

Tips for Small Business Owners:

- Research charities thoroughly before making donations.

- Use the IRS Tax Exempt Organization Search tool to verify a charity's legitimacy.

- Be wary of charities with names similar to well-known organizations.

4. Avoid False Fuel Tax Credit Claims

The IRS warns against improper claims for the fuel tax credit, which is generally limited to off-highway business use or farming.

Tips for Small Business Owners:

- Understand the specific requirements for fuel tax credits before claiming them.

- Consult with a tax professional if you're unsure about your eligibility.

5. Be Cautious of Misleading Employee Retention Credit (ERC) Claims

The ERC scam continues to be a significant concern in 2025, with promoters pushing false claims that can lead to audits and penalties.

Tips for Small Business Owners:

- Thoroughly review ERC eligibility requirements on the IRS website.

- Be skeptical of third-party "specialists" guaranteeing large ERC refunds.

- Consult with a trusted tax professional before claiming the ERC.

6. Understand Sick Leave and Family Leave Credits

While these credits were valuable during the pandemic, ensure you're not claiming expired benefits.

Tips for Small Business Owners:

- Stay updated on current tax credits available to your business.

- Maintain accurate records of employee leave to support any claims.

7. Don't Fall for Bogus Self-Employment Tax Credit Schemes

Be wary of promoters offering fictitious tax credits related to self-employment.

Tips for Small Business Owners:

- Educate yourself on legitimate self-employment tax deductions and credits.

- Report any suspicious offers of "secret" tax credit schemes to the IRS.

8. Properly Handle Household Employment Taxes

If you employ household workers, ensure you're correctly reporting and paying employment taxes.

Tips for Small Business Owners:

- Understand the threshold for reporting household employee wages.

- Use Schedule H (Form 1040) for reporting household employment taxes.

9. Be Wary of Misleading Offers in Compromise

Some promoters make exaggerated claims about settling tax debts for "pennies on the dollar" through the Offer in Compromise program.

Tips for Small Business Owners:

- Use the IRS's Offer in Compromise Pre-Qualifier tool to check your eligibility.

- Be skeptical of companies promising to resolve tax debts for a fraction of the amount owed.

10. Guard Against Phishing and Smishing Attacks

Sophisticated phishing (email) and smishing (text message) scams continue to target taxpayers and businesses.

Tips for Small Business Owners:

- Implement strong cybersecurity measures in your business.

- Train employees to recognize and report suspicious emails or texts.

- Never share sensitive information in response to unsolicited communications.

Conclusion

As a small business owner, staying vigilant against these tax scams is essential for protecting your financial interests and maintaining compliance. Remember, if an offer sounds too good to be true, it probably is. Always verify information with official IRS sources or consult with a trusted tax professional when in doubt.

By staying informed and implementing these protective measures, you can navigate the complex world of taxes with confidence, ensuring the financial health and longevity of your small business.

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As we've explored the myriad challenges facing small businesses today, it's clear that legal complexities extend far beyond tax issues. From contract negotiations to intellectual property protection, every aspect of your business requires careful legal consideration. But remember, you don't have to face these challenges alone. With the right legal guidance, you can turn potential pitfalls into opportunities for growth and security.

🏛️ Ready to Fortify Your Business with Rock-Solid Legal Protection? 🏛️

Don't let legal uncertainties cast a shadow over your entrepreneurial spirit. As a seasoned business attorney, I'm here to illuminate the path to comprehensive legal security for your small business.

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Actionable Tips for TV and Filmmaking Clients: Lessons from "The Pitt" Lawsuit

The recent legal battle between Warner Bros. Television and Michael Crichton's estate over "The Pitt" offers valuable insights for writers, tv show creators, and producers. Here are key takeaways and actionable tips:

• Protect Your Intellectual Property

Tip: Always keep in mind the need to secure comprehensive rights agreements that cover potential FUTURE productions, spin-offs, or reboots.

The Crichton estate's "frozen rights" provision demonstrates the importance of forward-thinking contracts. Ensure your agreements include clauses that protect your creative works from unauthorized adaptations or derivatives.

• Be Wary of Look-Alike Productions

Tip: Monitor or hire a lawyer or company to monitor industry developments closely for potential infringements on your intellectual property.

The similarities between "ER" and "The Pitt" raised red flags. Stay vigilant about new productions that bear striking resemblances to your work, especially when they involve the same creative team or network.

• Document All Negotiations

Tip: Maintain detailed records of all discussions, offers, and agreements related to your intellectual property.

The court noted the "timeline of various communications and events" in this case. Thorough documentation can be crucial evidence if legal disputes arise.

• Be Prepared for Anti-SLAPP Motions

Tip: Ensure your claims are well-substantiated before filing a lawsuit to withstand potential dismissal attempts.

Warner Bros. tried to dismiss the lawsuit on free speech grounds, likely through an anti-SLAPP motion. Build a strong case that can survive such challenges.

• Stay Informed About Industry Practices

Tip: Keep abreast of how studios and networks are handling reboots, revivals, and spin-offs of popular franchises.

Understanding current trends in how intellectual property is being leveraged can help you anticipate potential issues and negotiate more effectively.

• Be Cautious of Repackaging Attempts

Tip: Watch for attempts to circumvent your rights by repackaging familiar concepts under new names.

The alleged "pattern of conduct" by the studio to circumvent Crichton's rights serves as a warning. Be alert to subtle attempts to exploit your intellectual property.

By watching industry practices, studying cases like this, and implementing these actionable tips, tv and filmmaking clients can better protect their creative works, navigate complex negotiations, and maintain control over their intellectual property in an ever-evolving industry landscape.

The entertainment industry is a complex labyrinth of legal challenges, but you don't have to navigate it alone. ---

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8 Things to Know Before You Use a Non-Compete Agreement

When a valuable employee leaves an employer to start their own business or to work for a competitor, that employer may feel vulnerable to losing customers or trade secrets. That is why many employers make employees sign non-compete agreements. However, in New York and many other states, non-competes must be properly drafted or they will not be enforced. As a general rule, employers need to avoid a one-size-fits-all approach. For a non-compete to be effective it must be properly drafted taking into account the particular facts and scenarios between the employer and the employee such as the employer’s business, the employee’s role within the employer’s business, and the type of information the employee has access to.

To be enforceable, the non-compete must contain the 8 elements I describe in the infographic below.

Feel free to download a PDF version HERE.

For a strong agreement, you may also want to add the following provisions to a non-compete:

• a non-solicitation of employees;

• a non-solicitation of customers or clients;

• a confidentiality provision;

• a tolling provision to suspend the start date for the restrictive period after the employee has breached the agreement or is in litigation over it;

• a garden leave provision;

• a notice that the employee provides a unique, special, or extraordinary set of services;

• a specification that the non-compete applies after termination of employment for any reason; and

• a notice of immunity under the Defend Trade Secrets Act.

Feel free to consult me for guidance on drafting or reviewing your non-compete agreements and all other types of contracts and agreements at www.djimlaw.com/contact-me. If you enjoy this kind of information, advice, and news, then subscribe too.