IRS: Taxpayers Who Fall for Social Media Tax Credit Scams Pay the Price

The Internal Revenue Service (IRS) recently issued a warning about tax credit scams on social media. It also warned that taxpayers who fall for these scams can pay the price. When it comes to federal tax matters, it is up to taxpayers to ensure compliance, and relying on misinformation posted on social media is not an excuse for underpaying the IRS. Learn more from New Jersey tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group:

IRS Reports a “Surge” in Questionable Credit Claims on Individual Taxpayers’ Returns

In its warning, the IRS writes that it has recently experienced “a surge in questionable refund claims fueled by misleading social media posts and bad actors posing as tax experts.” This includes claims involving the Fuel Tax Credit and the Sick and Family Leave Credit. According to the IRS, thousands of taxpayers have filed fraudulent claims for these credits on their returns, “often resulting in the denial of refunds and steep penalties.”

More specifically, the IRS writes that it has imposed “over 32,000 penalties costing taxpayers more than $162 million.”

Thus, the IRS says, “[i]t’s in the taxpayer’s best interests to stay informed.”

While the IRS acknowledges that taxpayers may fall victim to tax credit scams on social media, it also makes clear that those who do are still responsible for paying the full amount they owe. This includes not only the full amount of their federal income tax liability, but also any interest and penalties triggered by their noncompliance. Interest and penalties can substantially increase the amount that taxpayers owe to the IRS, and, since interest continues to accrue on taxes and penalties until taxpayers come into compliance, taxpayers who have improperly claimed tax credits can continue to see their liability increase over time.

What Should You Do if You Fall for a Social Media Tax Credit Scam?

With all of this in mind, what should you do if you fell for a social media tax credit scam?

The answer to this question depends on whether the IRS is already looking into (or has already uncovered) your noncompliant filing. If you are currently facing a tax audit, you will need to deal with the audit head-on. You will need to make informed decisions throughout the audit process—and this includes making sure you do not try to rely on ignorance as a defense.

If you are not yet facing a tax audit, then you will want to deal with your situation proactively. While this might involve submitting an amended return and paying the taxes, interest, and penalties you owe, you may also have other (and better) options available. Here too, informed decision-making is key, and you will want to discuss your situation with an experienced New Jersey tax lawyer as soon as possible.

Speak with New Jersey Tax Lawyer Kevin E. Thorn in Confidence

If you have questions about how to avoid unnecessary interest and penalties from the IRS, we encourage you to contact us promptly. To schedule a confidential consultation with New Jersey tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, call us at 201-842-7696 or tell us how we can reach you online today.