The Internal Revenue Service recently issued a nationwide warning alerting taxpayers of the costly risks of falling victim to tax scams circulating on social media.
The consequences of following so-called “tax experts” online has cost taxpayers millions in fines — with the IRS reporting it has imposed more than 32,000 penalties costing more than $162 million.
“Since 2022, the IRS has seen a surge in questionable refund claims fueled by misleading social media posts and bad actors posing as tax experts,” the agency said.
“Many of the posts falsely claim that all taxpayers are eligible for credits they do not actually qualify for, such as those meant for self-employed individuals or businesses.”
Misinformed taxpayers following the advice of these “tax experts” has lead to an uptick in people filing for credits such as the Fuel Tax Credit and Sick and Family Leave Credit for which they do not actually qualify.
“People who follow this advice could end up with rejected claims and a penalty of up to $5,000 in addition to any other penalties that might apply,” IRS Director Return Integrity and Compliance Services James Clifford said.
How to avoid tax-related scams
The IRS advises taxpayers to “stay informed,” and be aware of how to spot these scams.
When it comes to social media scams, the IRS warns people to beware of:
- claims “everyone” can qualify for certain tax credits
- promises of “easy” or “fast” refunds with minimal documentation
- posts encouraging tax[ayers to file amended returns, even if you did not originally qualify for these credits
- advise to ignore IRS letters or respond to the agency with false information
Bottom line
When people incorrectly file their taxes, it can lead to delayed funds, denied refund claims, an IRS investigation and even a $5,000 civil penalty for filing frivolous returns.
The agency encourages people to “to be cautious when relying on social media posts,” and “always verify claims with credible sources or consult a qualified tax professional.”
If you do fall victim to a tax scam, you can amend the tax return, respond promptly to any letters from the IRS and report the scheme to the IRS by emailing phishing@irs.gov and file a complaint with the Treasury Inspector General for Tax Administration .
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