Quoted by The Epoch Times
There was a notice published on July 3, in which the IRS – International Revenue Service warned taxpayers of a new scam that involves the purchase of clean energy tax credits. the scammers/ fraudulent tax-return preparers are deceiving taxpayers into claiming these credits inappropriately under the Inflation Reduction Act – IRA.
“This is another example where scammers are trying to use the complexity of the tax law to entice people into claiming credits they’re not entitled to,” IRS Commissioner Danny Werfel said in the July 3 notice.
More Read
Under the IRA, both companies and individuals can purchase tax credits from clean energy projects. These credits are typically meant to offset tax liabilities generated from passive income. While acknowledging it, scammers are misleading taxpayers into claiming these credits against non-passive income sources which are for instance wages, social security, and retirement withdrawals. In this regard, IRS said that
“Most taxpayers do not have passive income and a passive income tax liability,” the IRA said. “Most investment activities are not considered passive.”
However, taxpayers who fall for the scam may not benefit from the claimed credits, instead, they may face repayment of the incorrect credits along with interest and possible penalties.
“Taxpayers should be wary of promoters pushing dubious credits like this and others,” Mr. Werfel said. “The IRS is watching out for this scam, and we urge people to use a reputable tax professional before claiming complex credits like clean energy.”
