The Internal Revenue Service (IRS) has begun to take a strong stance against fraudulent tax schemes based on misinformation from social media. In 2025 alone, the IRS assessed a staggering $162 million in penalties for false claims connected to content that primarily comes from social media platforms like Facebook, Twitter, and TikTok. This enforcement action demonstrates a growing trend in society, falling victim to the scammer population.
Taxpayers are being manipulated into schemes that push improper use of tax credits, like the Fuel Tax Credit and the Sick and Family Leave Credit. These scams entice taxpayers by advertising quick refunds with little documentation, but lead to denied claims and severe penalties. The IRS urges taxpayers to be cautious and to instead depend on trusted tax professionals / registered tax preparers.
Reason Behind IRS Crackdown on Social Media Tax Scams
In recent years, social media's influence on our decision-making has also rapidly expanded. Not surprisingly, there has also been an increase in the dissemination of tax misinformation. Many posts incorrectly claim that many taxpayers can take advantage of huge federal credits, while in reality, the credits are limited to certain types of taxpayers, like self-employed taxpayers or specific types of businesses.
The IRS's area of renewed scrutiny reveals the strangeness of these deceptive practices. Not only do the ineligible claims falsely reap tax refunds or tax underpayment, but they are also falsely exposing honest taxpayers to additional penalties. In summary, the highlights of the information collected by the IRS include:
- The potentially fraudulent returns reflect a higher proportion of tax credits like the Fuel Tax Credit and the Sick and Family Leave Credit.
- Taxpayers are misled by claims that say they can get “easy” or “fast” refunds.
- A higher proportion of the claims were filed improperly and/or with no legitimate entitlement.
- Penalties can include civil fines of up to $5,000 for unnecessary returns.
The IRS has imposed these penalties in an effort to both avert future scams and to safeguard the integrity of revenue and taxpayers.
How These Social Media Tax Scams Operate
Scam artists often utilize various schemes that prey on people's fear of financial deficiencies or need for a quick refund. Among the common attributes of these scams are the following:
- Generalize Eligibility: Posts that say all taxpayers qualify for certain credits, regardless of eligibility.
- Minimal Documents: Promising the same filing without additional detailed supporting documents.
- Pressure Amended Returns Illegally: Encouraging taxpayers to file amended returns for credits they never expensed properly.
- Ignoring Notices: Telling people to disregard IRS mail notices or give false information in their returns.
- Fake Professionals: Social media "experts" with no qualifications, suggesting they have quick fixes.
These are the ways these schemes exploit unsuspecting taxpayers, resulting in a troubling cycle of claim denials, audits, and penalties.
Consequences for Taxpayers Who Fall Victim
The consequences imposed on taxpayers making false claims are significant and multiple:
- No refund: The IRS reviews false claims and finds reasons not to release funds.
- Civil penalties: Taxpayers may face penalties up to $5,000 under IRC Section 6702 for submitting frivolous tax arguments.
- Audit risk: False claims may increase the chance of a tax audit or further IRS scrutiny.
- Increased legal exposure: Continuous misfiling can lead to a criminal investigation for tax fraud.
- Financial stress: The costs of interest, penalties, and legal fees for correcting past returns can take a toll on personal finances.
These consequences illustrate why it is important to cautiously and diligently approach tax preparation with a qualified professional like The Fino Partners.
IRS Recommendations for Protecting Yourself Against Tax Fraud
The IRS is advising you to take precautions against tax scams and their additional ramifications as follows:
Verify the Source:
Don't place yourself at risk by following social media posts or unsolicited tax advice from anyone other than a qualified professional.
Consult with a Qualified Professional:
A licensed accountant, enrolled agent, or tax preparer at The Fino Partners- registered with the IRS.
Respond to IRS Correspondence Promptly:
Ignoring IRS letters and/or notices will make matters worse.
Avoid Urgent Refund Promises:
Refunds will be made based on properly completed filings and processing time by the IRS.
Use the Right Resources:
irs.gov has alerts about scams, tax law changes, and compliance requirements.
Report Suspected Scams:
Email phishing@irs.gov, or file a complaint with the Treasury Inspector General for Tax Administration.
Consumers are expected to be vigilant and should maintain integrity related to their tax activities.
The Increased Use of Social Media in Tax Fraud
Social media presents great opportunities for being connected; however, it has also led to tax scams due to social media's ability to spread misinformation quickly to millions of people with little or no consequence. Tax scams are part of every viral video, influencer post, and targeted advertisement because:
- Consumers do not understand taxes.
- Consumers want easy money.
- Consumers are given urgency to file before they understand the consequences, and file quickly.
The IRS is working with social media companies to remove fraudulent content; however, taxpayer awareness and education are the most advantageous protections.
How Taxpayers Can Safeguard Their Returns Using Professional Help
Engaging a professional accountant or tax preparer with The Fino Partners helps ensure accurate claims submissions, compliance with IRS regulations, and readiness for prepared documents:
- Qualified accountants like The Fino Partners confirm eligibility before claims for credits are made.
- They provide systematized recordkeeping and audit trails.
- Qualified professionals facilitate actions to confirm that all working papers and receipts are collected.
- They provide representation during audit situations.
This professional route reduces risk and provides a platform of peace of mind.
What to Expect When You are Under an IRS Audit
If you are chosen for an audit, the IRS will request to view detailed information verifying your claims of items reported on your filed tax returns. Basically, to be prepared, you will need:
- Well-organized financial records - retained for up to six years.
- The ability to provide accurate and clear explanations for any deductions taken or credits received.
- Be up-front and honest with IRS auditors; timely responses are necessary.
- If needed, representation by tax professionals.
Taking the reasonable steps above will make the audit easier to manage.
Financial Consequences of Penalties & How to Prevent Them
Penalties of over 162 million dollars should simply indicate the financial consequences of the situation. You will also pay the price for:
- False Claims
- Failure to respond to IRS requests
- Filing frivolous tax positions
Avoidance is logical if you practice professional and prudent financial management, file accurately, and refrain from tax "tips" that do not have verifiable merit.
Leveraging Technology to Avoid Tax Scams
Digital tools have a dual role: they help taxpayers file their taxes, but they also create risk when manipulated by fraudsters. Regardless, taxpayers should:
- Employ IRS-authorized e-file companies.
- Access the IRS Free File and other official sources.
- Use a secure social document management system.
- Be wary of unofficial apps or services offering faster refunds.
- Consider your technological awareness as an addition to professional assistance.
Helpful Links
- How Professional Bookkeeping Helps You Stay IRS Audit-Ready
- IRS Tax Forum 2025: Registration Timelines & Insights
- New IRS Guidelines Impacting Offshore Outsourcing in 2025
In recent years, rising enforcement activities by the Internal Revenue Services (IRS) and million-dollar penalties, with the issuance of reports on the threat of social media tax scams, have highlighted that even black market advice and scams can hurt ignorant taxpayers. Taxpayers have to watch out for suspicious messages and claims, ensure they have received advice from a legitimate source, and establish a formal mechanism to maintain up-to-date and complete records.
Through this, individuals and businesses can reduce their chances of undergoing audits or penalty investigations. Working diligently with authorized accountants like The Fino Partners, following IRS guidelines, and utilizing secure technology helps taxpayers build their own compliant tax affairs and peace of mind now.
Contact The Fino Partners today to hire professional accountants and tax experts and remain prepared and ahead of such issues in the future.
