On Monday, the Internal Revenue Service (IRS) issued a vehement warning to the millions of American taxpayers who have been bombarded by “bad advice” circulating on social media, about supposed tax credits. The federal tax agency assured that there is “misleading” content in viral publications.
The IRS highlighted in its statement that certain social media users have been promoting the existence of an erroneous tax credit, allegedly available to self-employed and temporary workers during the years of the COVID-19 pandemic. According to these rumors, the tax exemption could reach $32.000, a figure that the agency categorically denied: that alleged tax credit definitely does not exist.
IRS Commissioner Danny Werfel explained that this is another misleading claim on social media that is misleading well-meaning taxpayers into thinking they are due a big payday. The official added that people should be vigilant not to be fooled by such misleading claims, which only seek to spread fake news and catch “clickbait” (a behavior of news sites that use misleading publications to get internet traffic).
“Before paying someone to file these claims, taxpayers should consult with a trusted tax professional to see if they meet the very limited eligibility scenarios,” Werfel added.
IRS Tax Credits That Actually Are Available
What may be available to taxpayers are sick and family leave benefits, limited to a select group of people who were self-employed in 2020 and 2021. These people had to stop working to take care of relatives sick with COVID-19 or who were in isolation due to the virus.
The IRS has seen thousands of dubious claims where it appears taxpayers are claiming credits for which they are not eligible, leading to refunds being delayed and taxpayers having to prove they have legitimate documentation to support these claims, the IRS added in its statement.
Don’t Fall For It, the IRS Warns
The IRS once again reminded taxpayers that they should seek legal advice when filing their taxes, instead of relying on information circulating on social networks, which is unreliable and can be erroneous.
Scammers constantly take advantage of people’s hopes and try to use the complexity of the tax system to convince them that there are secret ways to get a big refund.
Another fake news is the so-called ”tax credit for freelancers,” which has been going viral on social networks and, once again, is false. These rumors also include other benefits related to fuel tax credits and domestic employment taxes.
The IRS has been analyzing and found some similarities between the advertising around this ‘Self-employed Tax Credit’ and the aggressive promotion of the Credit for employee retention.
Both are technical credits that some have mischaracterized as a way for average taxpayers to get a big payout from the government. They are actually very limited credits that have a variety of complex requirements before people can qualify.