False Tax Credit Claims Tied to Social Media

The IRS is warning taxpayers about an increasing wave of scam tax schemes spreading across social media, which encourage the improper use of credits like the Fuel Tax Credit and the Sick and Family Leave Credit. These frauds have prompted thousands of people to submit incorrect or baseless tax returns, frequently leading to rejected refunds and hefty fines.

Starting in 2022, the agency has observed a sharp rise in dubious refund requests, driven by deceptive online posts and fraudsters pretending to be tax professionals. Numerous such posts wrongly assert that everyone qualifies for credits intended only for self-employed workers or companies. The IRS regularly maintains and refreshes a compilation of invalid tax positions on its website, IRS.gov, which may trigger penalties.”These scams aren’t just deceptive—they can hit taxpayers hard financially,” stated James Clifford, IRS Director of Return Integrity and Compliance Services. “Those who act on this misinformation might face denied claims plus a fine of up to $5,000, along with any other applicable sanctions.

To date, the IRS has issued more than 32,000 such penalties, totaling over $162 million in costs to taxpayers. Staying well-informed is crucial for everyone’s protection.”

How to Spot These Tax Credit Claims Scams

These scams often have common traits:

• Social media posts that claim everyone qualifies for certain tax credits.
• Promises of “easy” or “fast” refund with minimal documentation.
• Instructions to file amended returns, even if you did not originally qualify for the credits.
• Encouragement to ignore IRS letters or respond with false information.
• What happens when a taxpayer falls for a scam
• Taxpayers who submit false claims may face serious consequences:

What Happens When a Taxpayer Falls For a Scam

Taxpayers who submit false tax credit claims may face serious consequences:

• Delayed refunds.
• Denied refund claims.
• A $5,000 civil penalty under Internal Revenue Code Section 6702 for filing a frivolous return.
• Subject to further IRS examination and enforcement action.

What Taxpayers Can Do if They Are Targeted

• Taxpayers who believe they have been misled or filed an incorrect return should:
• Amend the tax return as soon as possible using Form 1040-X, Amended U.S. Individual Income Tax Return.
• Respond promptly to any IRS letters or notices.
• Seek help from a reputable tax professional or the IRS’s official resources at IRS.gov.
• If you suspect a tax scam, report it to the IRS by emailing phishing@irs.gov or file a complaint with the Treasury Inspector General for Tax Administration (TIGTA).

Stay informed

The IRS urges all taxpayers to be cautious when relying on social media posts. Always verify claims with credible sources or consult a qualified tax professional. Don’t Panic. Call Joe Franek.