Tax credit scams are on the rise again. Recently, Instagram has featured ads promoting a "Real Estate Broker Tax Credit." Additionally, people have started promoting the Sick and Family Leave credit from the COVID-relief tax provisions. These credits were available for employers and self-employed individuals in 2020 and 2021 for time taken off work to care for themselves or sick family members.
Similar to the Employee Retention Credit (ERC), the Sick and Family Leave credit is a valuable benefit for those who truly qualify. However, just like with the ERC, third-party promoters are falsely claiming that everyone is eligible and should amend their returns to claim it.
Fortunately, the IRS is acting swiftly and has issued warnings to taxpayers to be cautious of these scams. If you mistakenly file a return claiming a credit you aren't entitled to, such as the fuel tax credit or sick leave credits against fictitious household employees, you must submit an amended return to remove the incorrect credits.
Submitting a fictitious claim for a credit can result in a $5,000 penalty and potential criminal prosecution. Protect yourself by ensuring your tax claims are accurate and legitimate.
Need help navigating tax credits? Contact Verity CPAs at info@verity.cpa or call 808.546.5026 for expert guidance.
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