If a tax credit or deduction sounds too good to be true, it probably is.
There’s been a dramatic spike in suspicious refund claims, thanks to misleading social media advice and criminals posing as tax professionals. In fact, social media fraud even popped up on the IRS’ “Dirty Dozen” list, urging taxpayers to steer clear of bogus offers or advice.
Social media schemes aim to fool innocent scrollers with deceptive content, ranging from non-existent Employee Retention Credits (ERC) to elaborate phishing operations designed to steal personal information. What makes them even more dangerous is how legitimate they appear, often using official-looking graphics as they prey on people’s financial stress and vulnerabilities with the promise of easy money.
Heeding the red flags
As CPAs, we’ve pretty much seen it all. Here are some false social media claims to watch out for:
- Influencer endorsements without disclosure of paid partnerships
- Cryptocurrency-related tax “loopholes” that promise to eliminate tax liability
- System “glitches” that allow people to claim credits multiple times
- Foreign tax haven schemes to avoid U.S. taxes
- “AI-powered” tax strategies that claim to find hidden deductions
These scams tend to follow predictable patterns. They may post a universal claim like, “This is the credit the IRS doesn’t want you to know about!” Or they may offer an unrealistic promise like getting your refund in 24 hours. But any post that requests your personal information and the pressure to act immediately should be treated as a clear warning sign.
Putting up a solid defense
Social media is great for many things, but tax planning isn’t one of them. Always proceed with caution:
- Research independently. If you see a tax strategy advertised online, research it through official IRS publications and consult with a qualified professional about its validity before making any moves. Remember, legal tax strategies require documentation. If someone tells you record-keeping isn’t necessary, walk away.
- Don’t share information online. When it comes to taxes, the IRS will never contact you via email, social media or text. And legitimate tax professionals will only conduct business through secure, encrypted channels and established office locations — not over Facebook.
- Always verify credentials. Only work with licensed tax professionals who are credentialed through state licensing boards and other professional organizations.
- Trust your instincts. Nobody is giving away free money. Scammers rely on creating urgency and FOMO, so taking time to think things through is one of your strongest defenses.
Social media tax schemes can cost you big money, hefty penalties, damaged credit and even your dignity. Don’t hesitate to reach out to the tax professionals at Magone & Company for support.
This document is for informational purposes only and should not be considered tax or financial advice. Be sure to consult with a knowledgeable financial or legal advisor for guidance that is specific to your unique circumstances.