If It Sounds Too Good To Be True ...

When I write these blogs, I promise that I want to discuss new things as often as possible. I think that the best use of this space is when it can tell you about new things of which you may have been unaware. Some old things don’t go away, however, and I feel compelled to mention them again.

This happens often when it comes to scams because the presence of people trying to slide into our lives and find a way to get some money is never going to stop. Also growing, however, is the presence of people who mean well but can also be steering you wrong.

Last week, the IRS announced that due to fraudulent tax schemes circulating on social media, mostly concerning the misuse of credits, thousands of taxpayers have filed inaccurate returns which have led to $162 million in penalties.

Granted, many of these start with bad actors looking to charge people for filing an inaccurate tax return illegally claiming these credits and then disappearing before the IRS catches on and comes back with potential penalties. They start on social media, though, so their victims often end up being heavy users of it, who can then drive others they know on social media to the scheme, exponentially growing it without realizing it was a fraud from the start.

And as an added warning, claiming credits for which you do not quality is one of the clearest red flags that can cause the IRS to look at a return and an easy one for them to determine if it is valid or not.

As with many things that seem too good to be true, a little caution serves you well here. A quick Google search could even be enough to let you know if claims are really too good to be true. Granted, tax law can be complicated, though, which is what this scheme is taking advantage of, so it’s understandable if what the internet feeds you in a search doesn’t help.

This is why it can be so important to have a trusted advisor on your side when it comes to taxes. Then if you hear something that sounds like you may qualify for, you have someone to ask for clarity and can be confident in the answer they give. Of course, this answer may not be the one you were hoping for, but it’s a better outcome than paying back the money you weren’t eligible for in the first place with added penalties.

Beyond that, it also increases the chances of getting to know about any potential new credits for which you may qualify when actually filing the first time.

Warmly,

Josh Bousquet
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