Scammers work hard to try to steal money and personal information during tax season and all year long. It is important to remain alert and aware of these common scams to avoid losing money, personal information or client data.
Social media: Fraudulent form filing and bad advice
Social media can circulate inaccurate or misleading tax information, and the IRS has recently seen schemes that encourage people to submit false, inaccurate information in hopes of getting a refund or taking advantage of a credit, such as the Employee Retention Credit and the Fuel Tax Credit. Always remember that if something sounds too good to be true, it probably is.
Bogus self-employment tax credit
Social media advice continues to circulate about a non-existent “Self-Employment Tax Credit” that’s misleading taxpayers into filing false claims. Promoters market it as a way for self-employed people and gig workers to get payments of up to $32,000 for the COVID-19 pandemic period.
In reality, the underlying credit being referred to in social media is not called the “Self-Employment Tax Credit,” it’s a much more limited and technical credit called the Credits for Sick Leave and Family Leave. Many people simply do not qualify for these credits, and the IRS is closely reviewing claims coming in under this provision.
Taxpayers and tax professionals should be alert to fake communications posing as legitimate organizations in the tax and financial community, including the IRS and the states. These messages arrive in the form of an unsolicited text or email to lure victims into providing valuable personal and financial information that can lead to identity theft.
Offers in compromise are an important program to help people who can’t pay to settle their federal tax debts. But “offer in compromise mills” can aggressively promote offers in compromise in misleading ways to people who clearly don’t meet the qualifications, often costing taxpayers thousands of dollars.
As always, reach out to the Crosslin tax team if you have questions. We are here to help!
