IRS Warns of Social Media Tax Credit Schemes
What’s happening
The IRS reports a rise in fraudulent refund claims tied to social media advice. Posts are pushing credits that many taxpayers do not qualify for, such as the Fuel Tax Credit or the Sick and Family Leave Credit. Since 2022, the agency has imposed more than 32,000 penalties totaling over $162 million. Claims based on frivolous positions can also trigger a $5,000 penalty under Section 6702.
James Clifford, Director of Return Integrity and Compliance Services, cautions that these schemes can leave taxpayers with rejected claims and costly penalties. “So far, the IRS has imposed over 32,000 penalties costing taxpayers more than $162 million. It’s in the taxpayer’s best interest to stay informed,” Clifford said.
How to spot a scam
Watch for these red flags:
- Posts claiming everyone qualifies for a specific credit
- Promises of easy or fast refunds with little documentation
- Directions to file an amended return without eligibility
- Advice to ignore IRS letters or respond with false information
What happens if you follow bad advice
Consequences can include:
- Delayed or denied refunds
- A $5,000 civil penalty for a frivolous return
- Additional IRS examination and enforcement
If you already filed incorrectly
Take action now:
- Amend your return with Form 1040-X.
- Respond quickly to IRS letters and notices.
- Work with a reputable tax professional or use IRS.gov resources.
To report a suspected scam, email phishing@irs.gov or contact the Treasury Inspector General for Tax Administration.
Stay informed
Be cautious with tax tips on social media. Verify eligibility before you file. When in doubt, check official guidance or speak with a qualified tax pro.
