IRS Warns Social Media Tax Scams Could Cost You Thousands

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Posted: 12th September 2025

Michelle Thomas

IRS Warns Social Media Tax Scams Could Cost You Thousands

The IRS is sounding the alarm on a troubling rise in tax scams fueled by social media.

Across Facebook, TikTok, and other platforms, self-proclaimed “experts” are luring taxpayers into filing bogus refund claims using credits like the Fuel Tax Credit or the Sick and Family Leave Credit - programs that don’t apply to most people.

Since 2022, these schemes have triggered a wave of frivolous returns. Many filers never see the refund they were promised, but they do end up with something else: steep penalties.

According to the IRS, more than 32,000 taxpayers have already been fined, adding up to over $162 million in penalties. (Source: The Internal Revenue Service)

James Clifford, Director of Return Integrity and Compliance Services at the IRS, put it bluntly:

“These schemes are not only misleading but can cost taxpayers dearly. People who follow this advice could end up with rejected claims and a penalty of up to $5,000 in addition to any other penalties that might apply."

"So far, the IRS has imposed over 32,000 penalties costing taxpayers more than $162 million. It’s in the taxpayer’s best interest to stay informed.”

Spotting a Tax Scam Before It’s Too Late

These scams often share familiar traits. Watch out for:

Posts claiming everyone qualifies for certain credits.
Promises of “easy” or “fast” refunds with barely any paperwork.
Instructions to file an amended return even when you don’t qualify.
Advice to ignore IRS letters or respond with false information.

If it sounds too good to be true, it probably is.

The Real Cost of Falling for a Scam

What starts as a “refund hack” online can spiral into serious financial trouble. Taxpayers who submit false claims often face:

Refund delays lasting weeks or months.
Outright denial of refund requests.
A $5,000 civil penalty under Section 6702 of the tax code.
Increased scrutiny from the IRS, including audits or enforcement action.

Beyond Social Media: Fraudulent Credits Target Wealthy Taxpayers

Federal investigators are also examining a major scheme aimed at wealthy taxpayers, where companies including White River Energy Corp. and Nepsis allegedly sold fictitious “tribal tax credits.”

These credits have no basis in U.S. tax law, yet more than $24 million was marketed as deductible. Taxpayers who purchased them now face audits, denied claims, and penalties, while the Justice Department investigates the promoters, highlighting how tax fraud is shifting from viral social media tricks to more elaborate, fabricated schemes.

What To Do If You’ve Already Filed

If you realize you’ve been misled or filed a return based on bad advice, the IRS says it’s best to act quickly:

File an amended return using Form 1040-X.
Don’t ignore letters from the IRS - respond right away.
Consult a trusted tax professional or use official IRS resources.
Report suspected scams to the IRS at phishing@irs.gov or file a complaint with TIGTA.

Stay Ahead of Scammers

The IRS stresses one simple rule: don’t take tax advice from social media. Always double-check with official sources before making a move.

See the latest alerts on the IRS Tax Scams page.
Follow @IRStaxsecurity on X for real-time updates.

Taxpayers should be cautious of anyone promising quick or inflated refunds online. The safest approach is to rely on official IRS guidance or a qualified tax professional, as pursuing false credits can result in significant financial consequences.