Taxlink

Every year, the IRS issues a list of the "dirty dozen" tax scams. It's always interesting to read what the IRS is either warning taxpayers about or focusing its efforts to enforce on. This year, the list has a lot to do with social media.

Taxes are very complex and based on specific fact patterns. Getting tax advice from social media is often misleading or just flat-out wrong. Given agriculture has many one-off tax rules, the odds are that unless the information is from a reputable source, it might not be 100% accurate. Below are a few of the dirty dozen that caught my eye.

-- False fuel tax claims. One of the dirty dozen that directly affects farmers is the fuel tax credit. The credit is meant for off-highway and farm use. However, increasingly, more people are misusing the tax credit. This is on the IRS' radar, so make sure you are taking the credit properly.

-- Email phishing scams. The IRS has seen a tremendous number of email scams targeting taxpayers. These messages are posing as the IRS or other legitimate tax professionals (accounting firms or investment companies). In addition to emails, people are getting "smishing" -- text or SMS messages on your phone.

-- Social media. With YouTube, TikTok and other social media all the rage, people will say and do anything to get noticed. There are many "tax professionals" posting content regularly that is misleading or just plain wrong.

-- Fake charities. With all the natural disasters and crises in America, fake charities are popping up. If you give money to a fake charity, you are not able to deduct your contribution.

-- Misleading Offers in Compromise. The Offer in Compromise (OIC) program is aimed at helping taxpayers settle federal debt they are unable to pay. However, "mills" are aggressively promoting OIC to people who don't qualify and charge them thousands of dollars. Ultimately, the OIC isn't accepted, and people are out the money they paid.

-- Overstated withholding. One scam that is floating around social media encourages people to overstate their withholding (W-2 or 1099s). The scammers suggest filing bogus tax returns in order to get large refunds. However, if the IRS can't match a W-2, the tax refund would be suspended.

-- Ghost tax return preparers. The IRS issued a warning about "shady tax professionals" and those who charge a fee based on the tax refund. IRS encourages taxpayers never to sign a blank or incomplete return.

As always, take things with a grain of salt. If someone tells you something that is too good to be true, it probably is.

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DTN Tax Columnist Rod Mauszycki, J.D., MBT, is a tax principal with CLA (CliftonLarsonAllen) in Minneapolis, Minnesota. Read Rod's "Ask the Taxman" column at https://www.dtnpf.com/…. You may email Rod at taxman@dtn.com.

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