In a recent announcement, the IRS has issued a strong warning to taxpayers regarding misleading claims circulating about a so-called "Self-Employment Tax Credit." Promoters and social media platforms have been peddling inaccurate information, suggesting that self-employed individuals are eligible for a tax credit that simply does not exist.

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The false claims often describe a lucrative tax credit available exclusively to self-employed individuals. These misleading promotions suggest that by claiming this non-existent credit, self-employed taxpayers can significantly reduce their tax liability or even receive a substantial refund. These promotions are designed to appeal to those looking for ways to save on taxes, especially as tax season approaches.

 

The IRS has made it clear: there is no such thing as a “Self-Employment Tax Credit.” The tax agency emphasizes that these claims are not only false but also potentially harmful. Taxpayers who fall for these misleading claims risk facing significant penalties, including fines and interest on unpaid taxes, as well as the possibility of audits.

 

How the Scam Works

 

Typically, promoters of these false claims use persuasive language and fake testimonials to lure taxpayers. They may charge fees for their "services" in helping individuals claim the bogus credit or direct them to file amended tax returns to include the non-existent credit. In some cases, these promoters have used social media platforms to reach a wider audience, making the scam more pervasive.

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Following misleading tax advice can lead to serious consequences. When taxpayers file returns that include false claims, they are held responsible for the accuracy of their returns. This means that even if someone else prepares the return, the taxpayer is still liable for any errors. The IRS has sophisticated tools to detect fraudulent claims and can audit returns that seem suspicious.

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What Taxpayers Should Do

 

To protect themselves, taxpayers should:

1. Verify Information: Always verify the authenticity of any tax credit or deduction before including it on your return. The IRS website is a reliable source of accurate information.
2. Consult a Professional: If unsure about any tax-related matter, consult a reputable tax professional. Avoid those who promise unusually large refunds or suggest credits that sound too good to be true.
3. Report Scams: If you encounter a promoter or social media post making false claims about tax credits, report it to the IRS. This helps the agency take action against scammers and protect other taxpayers.

 

The IRS’s warning about the non-existent “Self-Employment Tax Credit” is a timely reminder to remain vigilant against tax scams. Always seek accurate information and professional advice when it comes to tax matters. Remember, if something sounds too good to be true, it probably is.

 

For more information, visit the official IRS website or consult your Faw Casson advisor. Stay informed and stay safe this tax season!