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Alert: Misleading Claims Surrounding the Employee Retention Credit

The Internal Revenue Service (IRS) recently issued a renewed alert, cautioning businesses and tax-exempt groups about the prevalence of misleading claims surrounding the Employee Retention Credit. The IRS, along with tax professionals, has observed a surge in aggressive advertising through various mediums, such as broadcast advertisements, direct mail solicitations, and online promotions, all related to the Employee Retention Credit. Although the credit is indeed legitimate, there are numerous promoters who are distorting and exaggerating the eligibility criteria for claiming these credits.

Renewed Caution by the IRS

This warning comes in response to blatant efforts by these promoters to deceive and encourage ineligible individuals to falsely claim the credit.

Deceptive Promoters and Exaggerated Eligibility Criteria

To address this issue, the IRS has implemented a streamlined reporting process that enables businesses and payroll service providers to promptly report any data losses associated with the W-2 scam that is currently circulating. By being informed in a timely manner, the IRS can take necessary measures to prevent employees from falling victim to identity theft and fraudulent tax returns filed under their names.

Streamlined Reporting Process for Data Losses Associated with W-2 Scam

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It is crucial for taxpayers and tax professionals to remain vigilant and cautious regarding fraudulent communications, especially those pretending to represent legitimate organizations within the tax and financial community, including the IRS and state tax agencies. These deceptive communications may take the form of emails, phone calls, or even physical mail, attempting to extract personal information or financial details for nefarious purposes.

Protecting Employees from Identity Theft and Fraudulent Tax Returns

To combat such scams, the IRS encourages individuals to stay informed about the latest tax-related news and announcements through reliable sources. Taxpayers should be aware that the IRS does not initiate contact via email, text messages, or social media channels to request personal or financial information. Legitimate correspondence from the IRS is typically initiated through traditional mail, and official IRS representatives will always provide proper identification when communicating in person or over the phone.

Vigilance and Caution Against Fraudulent Communications

Additionally, if individuals suspect they have received a fraudulent communication or have been targeted by a scam, they should report the incident to the IRS. This can be done by forwarding suspicious emails or contacting the IRS directly through their official channels.

Identifying Scams Impersonating Legitimate Tax Organizations

By exercising caution and promptly reporting any suspicious activities, businesses, taxpayers, and tax professionals can help safeguard against misleading claims and fraudulent schemes related to tax credits and other financial matters. The collective effort to remain vigilant and informed plays a crucial role in maintaining the integrity of the tax system and protecting individuals from falling victim to financial scams.

Posted in News by Trent May 25, 2023

Author: Trent

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