Misinformation continues to spread over the internet, and taxpayers appear to be falling for it. The Internal Revenue Service (IRS) has issued a warning to taxpayers about false material circulating on social media about a putative tax benefit that taxpayers were not taking advantage of.
The agency explained that this misinformation inaccurately implies the existence of a major tax relief for self-employed and gig workers during the COVID-19 outbreak, which may be worth up to $32,000 for some people. The IRS declared explicitly that this assertion is false.
IRS Commissioner Danny Werfel addressed the problem, saying, “This is another deceptive social media claim that is duping well-meaning taxpayers into believing they are due a large payout.
People should not be deceived by outrageous assertions made on social media. Before hiring someone to file these claims, taxpayers should speak with a reputable tax professional to discover if they qualify under the very limited eligibility circumstances.”
Does the IRS recognize this tax credit?
The IRS emphasized that, while certain tax benefits exist for sick and family leave, they are highly restricted and will only be available to a specific group of self-employed individuals in 2020 and 2021 who were forced to stop working to care for people affected by COVID-19 or who were isolated due to the virus and thus lost their revenue stream.
According to the agency’s statement, “The IRS has seen thousands of dubious claims come in where it appears taxpayers are claiming credits for which they are not eligible, leading to refunds being delayed and the need for taxpayers to show they have legitimate documentation to support these claims.”
Taxpayers are strongly recommended to seek expert assistance when filing their taxes, rather than relying on unverified information obtained online that is solely intended to generate clicks and not educate them.
Commissioner Werfel said, “Scammers constantly prey on 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 frauds demonstrate the importance of carefully reviewing the tax return for accuracy before filing and seeking guidance from a trustworthy tax professional, rather than someone looking to make a fast profit or a questionable source on social media.”
The IRS stated that the “Self Employment Tax Credit” is only the latest in a string of misleading claims about tax advantages appearing on social media.
Previous misinformation included incorrect details about fuel tax credits and household employment taxes, all of which are only available to very small segments of the population in very specific circumstances, but were marketed to the masses as if they were a secret the government did not want you to know about.
“The IRS is seeing some similarities to marketing around this ‘Self Employment Tax Credit’ similar to aggressive promotion of the Employee Retention Credit,” noted the tax bureau. “Both are technical credits, which have been misrepresented by some as a mechanism for ordinary taxpayers to get large government payments. In truth, these are extremely limited credits with a slew of rigorous conditions before anyone may qualify.”
The IRS’s advisory serves as an important reminder to taxpayers to exercise caution while accessing tax-related information on social media. Misinformation can cause major issues, such as delayed reimbursements and the need to produce additional evidence to confirm eligibility for certain claims.
The agency will always post new material on their website for the public to see in the clearest possible manner. If you have any doubts, you can contact specialists who will explain any points of conflict and ensure that your tax filings are accurate.