IRS Imposes $162M Penalties Over Social Media Tax Credit Scams

Since 2022, the IRS has imposed over $162 million in penalties on more than 32,000 taxpayers who filed false or frivolous tax credit claims promoted by misleading social media advice. The schemes mainly involve misuse of the Fuel Tax Credit, intended for specific business uses, and the Sick and Family Leave Credit, which is limited to certain self-employed individuals and specific years. These social media posts often falsely claim that all taxpayers qualify for such credits, promise quick refunds with minimal documentation, and encourage ignoring IRS correspondence or submitting false information. IRS officials warn that following such advice can lead to rejected claims, delayed refunds, and penalties up to $5,000 or more under tax law. Experts advise taxpayers to be skeptical of tax advice that sounds too good to be true and to consult qualified professionals instead. The IRS regularly updates a list of frivolous tax positions to help taxpayers avoid costly mistakes.