The IRS has issued a crucial warning to taxpayers, urging them to seek advice from trusted tax professionals rather than relying on potentially misleading information from social media or marketers. This alert comes in response to false claims about a non-existent “Self Employment Tax Credit” circulating online, which has been misleading many into filing erroneous tax claims.
The False Promise of the “Self Employment Tax Credit”
Promoters on social media have been advertising the “Self Employment Tax Credit” as a means for self-employed individuals and gig workers to receive substantial payments, particularly relating to the COVID-19 pandemic period. Some claims have even suggested that individuals could receive up to $32,000. However, these claims are entirely unfounded.
The Truth About Credits for Sick Leave and Family Leave
What is being misrepresented as the “Self Employment Tax Credit” is, in fact, the much narrower Credits for Sick Leave and Family Leave. These credits are applicable only under very specific conditions for self-employed individuals during the years 2020 and 2021. They are not available for the 2023 tax returns and are subject to rigorous IRS review. Filing erroneous claims can result in significant risk for taxpayers.
IRS Commissioner’s Warning
IRS Commissioner Danny Werfel emphasized, “This is another misleading social media claim that’s fooling well-meaning taxpayers into thinking they’re due a big payday. 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.”
Common Misuses and Scams
The IRS has noted numerous instances where taxpayers have incorrectly used Form 7202 to claim credits they are not eligible for. Inaccurate claims often stem from income earned as employees, not as self-employed individuals. Additionally, taxpayers should be aware of other prevalent scams, such as those involving the Fuel Tax Credit and household employment taxes. These scams often lead to delayed refunds and require taxpayers to provide legitimate documentation to support their claims.
The Danger of Bad Advice
The IRS warns that social media and dubious marketers are perpetuating myths about easy ways to get large refunds. Commissioner Werfel stated, “Scam artists constantly prey on people’s hopes and try to use the complexity of the tax system to convince people there are secret ways to get a big refund. All of these scams illustrate that it’s important to carefully review the tax return for accuracy before filing and rely on the advice of a trusted tax professional, not someone trying to make a quick buck or a questionable source on social media.”
Protect Yourself: Consult a Tax Professional
In conclusion, taxpayers are strongly urged to avoid relying on social media for tax advice. Instead, consulting a trusted tax professional can ensure that your claims are accurate and legitimate, protecting you from the risks of filing incorrect tax returns and falling victim to scams.
For more detailed information and FAQs on the Credits for Sick Leave and Family Leave, visit the IRS website. Stay informed and protect yourself from tax scams by seeking reliable and professional advice.
Click here to read the IRS news release.