IRS Penalties & Tax Credit Scams 2025: New Alerts You Must Know
Tax season can already feel stressful. The last thing anyone wants is to get caught up in a scam or face big penalties from the IRS. Recently, the Internal Revenue Service (IRS) has released new alerts warning taxpayers about false claims for tax credits spreading online.
At the same time, the IRS is also sharing new guidance under the One Big Beautiful Bill Act (OBBBA), reminding people of changes to tax rules.
In this article, we’ll explain what these alerts mean, what scams to watch out for, and how you can stay safe and avoid costly mistakes.
What Are IRS Penalties?
An IRS penalty is a fine or fee you may have to pay if you break tax rules. Common reasons for penalties include:
- Filing your taxes late
- Paying your taxes late
- Claiming credits or deductions you’re not allowed to
- Making mistakes on your return that look like fraud
Some penalties are small, but others can add up quickly. In serious cases, people could face criminal charges.
That’s why it’s so important to pay attention to IRS alerts.
The Rise of False Tax Credit Claims
The IRS says scammers are pushing fake tax credit schemes on social media platforms like TikTok, Facebook, and Instagram. These posts often promise big refunds if you claim certain credits.
But here’s the truth: if you claim credits you don’t qualify for, you could face serious penalties.
Some of the most common false claims involve:
- Fuel Tax Credit – This credit is usually only for farmers, truckers, and businesses that use off-highway fuel. Most regular taxpayers do not qualify.
- Sick and Family Leave Credit – This was a special pandemic-era credit that no longer applies to most taxpayers. Scammers are tricking people into thinking they can still claim it.
- Household Employment Credit scams – Some schemes involve claiming credits for paying household workers when no real payments exist.
These scams might sound good, but they can lead to audits, fines, and even fraud charges.
IRS Is Cracking Down
The IRS has made it clear: people who promote or claim these false credits will face consequences.
- Taxpayers who knowingly file false claims may face penalties of up to $5,000 for a frivolous return.
- Tax preparers who help people file fake claims could lose their licenses or face criminal charges.
- The IRS is using advanced technology to spot suspicious filings faster than ever.
In short, if something sounds too good to be true, it probably is.
IRS Guidance Under the OBBBA Law
Along with warnings about scams, the IRS is also issuing new guidance under the OBBBA law. This law, recently passed, changes several tax rules, including:
- No tax on tips: Some service workers can now exclude tip income up to a set limit.
- Changes to child and family tax credits: The amounts and eligibility rules may be different.
- Adjustments for businesses: Things like bonus depreciation and deductions have been updated.
The IRS is reminding taxpayers to stay up to date so they file correctly and avoid problems.
Why Social Media Scams Spread Fast
One reason these false claims spread so quickly is social media. Posts promising “easy money” or “secret tax tricks” often go viral.
But here’s the risk:
- Scammers rarely explain the rules.
- Many people who follow the advice don’t realize they’re filing false claims.
- Once the IRS finds the mistake, you’re the one responsible, not the influencer who posted it.
That’s why the IRS is urging taxpayers to only trust official sources like IRS.gov or licensed tax professionals.
How to Protect Yourself
Here are some simple steps to stay safe during tax season:
- Ignore viral tax hacks – If you see a post claiming you can get huge refunds by using a little-known credit, be careful.
- Check IRS.gov – The official IRS website has the latest info on what credits are real and who qualifies.
- Work with a trusted professional – If you’re not sure, use a CPA, tax advisor, or enrolled agent.
- Keep good records – Always keep receipts, pay stubs, and other documents to prove your claims.
- File on time and honestly – Even small mistakes can lead to headaches.
What Happens If You Claim a False Credit?
If the IRS finds out you claimed a credit you’re not entitled to, several things could happen:
- The IRS will deny the credit and reduce your refund (or increase what you owe).
- You may have to pay interest and penalties.
- In serious cases, you could be banned from claiming certain credits for up to 10 years.
- Fraud cases could even lead to criminal charges.
That’s why it’s never worth the risk.
A Real-Life Example
Imagine this:
John sees a TikTok video telling him he can claim the Fuel Tax Credit, even though he works an office job and never uses off-road fuel. He files his return with the credit and gets a big refund.
Months later, the IRS audits him. They deny the credit, demand the money back, add penalties, and charge interest. John ends up owing more than he received.
This is exactly what the IRS is trying to prevent with their new alerts.
Why This Matters for Everyone
Even if you don’t fall for a scam, these false claims hurt everyone. When scammers file fake refunds, it:
- Slows down processing for honest taxpayers
- Costs the government billions of dollars
- Increases the risk of audits for certain groups
By cracking down, the IRS hopes to keep the tax system fair.
Final Thoughts
The IRS is taking scams and false claims seriously. From penalties for fake tax credits to new guidance under the OBBBA law, taxpayers need to stay alert.
The best way to protect yourself is to stick to the rules, avoid social media tax tricks, and trust only official IRS guidance or licensed professionals.
Remember: fast money from a fake credit can turn into a big problem later. Be safe, file honestly, and keep more of what you truly earn.