In a recent alert, the Internal Revenue Service (IRS) issued a warning to taxpayers about the presence on social networks of tax claims that are not real and also of misleading advice, especially one related to a tax credit that, as the agency indicates, is not completely “accurate”.
The IRS commented that certain users on social networks made the mention of the existence of a tax credit for self-employed workers and employees of the gig economy – without technological support – who have been affected over the years of the COVID-19 pandemic, they call it the “Self-employment Tax Credit” and there it is suggested that many people are eligible for the tax credit and payments of up to US$32,000, when they certainly do not qualify.
“This is another misleading social media claim that’s fooling well-meaning taxpayers into thinking they’re due a big payday,” said IRS Commissioner Danny Werfel. “People shouldn’t be misled by outlandish claims they see on social media. 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.”
Be Cautious of Claims for Non-Existent “Self-employment Tax Credit”
The IRS explained that there are benefits for family leave and for health indispositions, which are available to some taxpayers. Especially, these are called sick leave and family leave credit and are limited to an exclusive group of people who were self-employed in 2020 and 2021 and were forced to put aside their work obligations to care for people sick with COVID-19 or who were quarantined by the virus.
The official authorities gave the explanation that to qualify for the Credits for sick leave and family leave, self-employed workers have to comply with a variety of technical reasons in 2020 and 2021 that did not allow them to work, among them, the care of a person with a quarantine or isolation order, “The IRS has a detailed set of frequently asked questions, which describe the technical requirements to comply with this provision of the law,” they detailed.
Don’t Trust “Self-employment Tax Credit” Claims on Social Media
In recent weeks, the agency received thousands of dubious claims in which it seems that taxpayers made the application for credits for which they were not eligible candidates, resulting in delays in returns and the need for taxpayers to provide legitimate documentation to support their applications.
To avoid falling into these traps, the IRS advised taxpayers to seek more expert opinions when filing their taxes and not rely on unreliable information that is published on social networks.
Werfel commented that scammers “constantly take advantage of people’s hopes and try to use the complexity of the tax system to convince people that there are secret ways to get a big refund. All of these scams illustrate that it is important to carefully review the tax return for accuracy before filing and to trust the advice of a trusted tax professional, not someone trying to make a quick buck or a questionable source on social media.”
The IRS also said that the so-called “Self-employment Tax Credit” was just the latest false information that went viral on social media about tax breaks. This class of hoaxes also includes false benefits that relate to fuel tax credits and household employment taxes.
The agency said the marketing of this “self-employment tax credit” was very similar to the aggressive promotion of the employee retention credit, both technical credits, “which some mischaracterized, as a way for average taxpayers to get a big payment from the government. In reality, these are very limited credits that have a variety of complex requirements before people can qualify,” the IRS said.