The IRS Just Added a New Scam to Its Dirty Dozen List. CPAs Need to Watch For This.

The IRS just updated its annual Dirty Dozen list of tax scams, and for the first time in years, there's something new: fabricated Form 2439 claims.

Form 2439 is the Notice to Shareholder of Undistributed Long-Term Capital Gains. It's used by regulated investment companies (RICs) and real estate investment trusts (REITs) to report capital gains taxes they paid on shareholders' behalf. The shareholder then claims a refundable credit on their return.

Most taxpayers have never heard of it. Scammers are banking on that.

The Scam

According to the IRS announcement on March 6, fraudsters are filing returns with overstated or completely fabricated Form 2439 claims.

Some claims are linked to organizations that aren't even RICs or REITs. Others involve fake claims tied to real, well-known investment funds - hoping the IRS won't check closely.

The IRS says it's seen a surge in these filings over the past year. Enough to boot the fuel tax credit scam off the Dirty Dozen and replace it with this one.

That's significant. The Dirty Dozen list doesn't change much year to year. Most entries - phishing, ghost preparers, social media tax advice - are recurring threats. When something new makes the list, it means the IRS is seeing volume.

Why This Works (Until It Doesn't)

Form 2439 is obscure. It's not something most preparers see regularly. Unless you work with clients who hold RIC or REIT shares that pay out undistributed capital gains, you've probably never filed one.

Scammers exploit that obscurity. They fabricate the form, inflate the credit, and hope it slips through. And because the credit is refundable, a fake claim can generate a big refund.

The problem: the IRS knows exactly which organizations issued legitimate Forms 2439. They cross-check every claim. When a fake form shows up - or a real form with inflated numbers - it triggers an audit.

And unlike some scams where the IRS might just adjust the return and send a bill, fabricated refund claims can escalate to criminal fraud charges.

What CPAs Need to Watch For

If a client brings you a Form 2439, verify it. Ask where it came from. Check the issuing organization. If it's not a recognized RIC or REIT, it's fake.

If the numbers look inflated - say, a $10,000 credit from a $5,000 investment - dig deeper. Legitimate Forms 2439 are proportional to the shareholder's investment and the fund's undistributed gains.

The IRS specifically flagged claims tied to organizations that aren't even investment funds. If you see a Form 2439 from something that's clearly not a RIC or REIT, reject it. That's not a mistake. That's fraud.

The Rest of the Dirty Dozen

The other 11 scams are mostly holdovers from prior years:

• IRS impersonation (phishing, smishing, QR code scams)

• AI-powered phone scams (robocalls, voice mimicry, spoofed caller IDs)

• Fake charities (especially after disasters)

• Misleading social media tax advice (still a major problem)

• Identity theft targeting IRS online accounts

• Bogus "self-employment tax credit" promotions

• Ghost preparers (unsigned returns, no PTIN)

• Noncash charitable contribution schemes (inflated property values)

• Overstated withholding schemes (fabricated W-2 data)

• Spear-phishing and malware targeting tax pros

• Aggressive offer in compromise marketing

None of those are new. But they're still active, and the IRS is still seeing volume.

Bottom Line

Scams evolve. This year, it's Form 2439. Next year, it'll be something else.

The principle stays the same: verify everything. If a client brings you a form or credit you've never seen before, research it. Check the IRS guidance. Look at the source documents. Ask questions.

And if something feels off, it probably is.