IRS Adds Capital Gains Scam to ‘Dirty Dozen’ List of Schemes

The IRS released its annual ‘dirty dozen’ list of tax scams for 2026 Thursday, warning about a handful of new and old schemes used against taxpayers.

The IRS added abusive undistributed long-term capital gains claims to its list this year after it saw an uptick in overstated or fabricated claims on the Form 2439. Shareholders of investment funds or real estate trusts can claim a refundable tax credit for taxes paid on undistributed capital gains on the form.

“Improper claims may result in refund delays, audits, penalties, or enforcement action,” The agency said. This scheme replaced fuel ...