The IRS has issued a warning to taxpayers about ongoing fraudulent tax schemes promoted on social media platforms. These schemes encourage individuals to misuse business tax credits, such as the Fuel Tax Credit, which is primarily intended for businesses that purchase fuel for off-highway uses like farming or landscaping.
Federal taxes collected from fuel sales are used to fund highway maintenance. Most individual taxpayers do not qualify for the Fuel Tax Credit, but scammers continue to promote false claims suggesting otherwise.
“These schemes are not only misleading but can cost taxpayers dearly,” said James Clifford, IRS Director of Return Integrity and Compliance Services.
Clifford noted that the IRS has imposed more than 32,000 penalties related to these scams, resulting in losses of over $162 million for taxpayers.
The agency reports a sharp increase in questionable refund claims since 2022, driven by misleading social media posts and individuals falsely presenting themselves as tax experts. Many of these posts incorrectly claim that all taxpayers are eligible for certain credits reserved for self-employed individuals or businesses.
One frequent scam involves the Sick and Family Leave Credit. This temporary payroll tax benefit was created during the COVID-19 pandemic to help small and mid-size employers cover paid leave costs for employees affected by the virus. The credit expired on September 30, 2021, yet some scammers still urge W-2 employees to file Form 7202—which was intended only for self-employed individuals—and attempt to claim the expired credit.
Taxpayers who submit false claims risk having their refunds delayed or denied, incurring a $5,000 penalty for filing a frivolous return, and facing possible further enforcement action from the IRS. The agency advises all taxpayers to exercise caution when considering information found on social media and recommends verifying any claims with reputable sources or consulting qualified tax professionals.
For ongoing updates on current tax scams and warnings from the IRS, visit https://www.irs.gov/newsroom/tax-scams-consumer-alerts.
