Key IRS announcement impacting millions of Americans

Misinformation continues to run rampant on the internet, and taxpayers seem to be falling for it. Internal Revenue Service (IRS) issued a warning to taxpayers about misleading information circulating on social media regarding a supposed tax credit that taxpayers were not taking advantage of. The agency clarified that this misinformation falsely suggests the availability of a significant tax break for self-employed and gig workers during the COVID-19 pandemic, which could purportedly be as much as $32,000 for some individuals. The IRS unequivocally stated that this claim is not true.

IRS Commissioner Danny Werfel addressed the issue, stating, “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.”

Does the IRS recognize this tax credit?

The IRS emphasized that while certain tax benefits do exist for sick and family leave, they are highly restricted and that these benefits are available only to a specific group of self-employed individuals from 2020 and 2021 who had to stop working to care for people affected by COVID-19 or who were themselves isolated due to the virus and thus lost their revenue stream.

According to a statement made by the agency “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 advised to seek professional guidance when filing their taxes, rather than relying on unverified information found online whose only purpose is to get clicks and not educate individuals. Commissioner Werfel warned “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.”

The IRS highlighted that the “Self Employment Tax Credit” is merely the latest in a series of false claims regarding tax breaks circulating on social media. Previous misinformation has also included incorrect details about fuel tax credits and household employment taxes, all of which are only available to very small segments of the population that meet very specific circumstances and yet were marketed to the masses as if it was a secret the government did not want you to know.

“The IRS is seeing some similarities to marketing around this ‘Self Employment Tax Credit‘ similar to aggressive promotion of the Employee Retention Credit,” the IRS stated. “Both are technical credits that have been mischaracterized by some as a way for average taxpayers to get a big government payment. In reality, these are very limited credits that have a variety of complex requirements before people can qualify.”

The IRS’s alert serves as a critical reminder for taxpayers to approach tax-related information on social media with caution. Misinformation can lead to significant complications, such as delayed refunds and the need to provide extensive documentation to prove eligibility for certain claims. The agency will always publish new information on their website for the public to see and in the clearest way possible. In case of any doubt, there are experts that you can call and that will explain any point of contention so that your tax filings are accurate.

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