Avoid improper claims for business credits
The Internal Revenue Service recently warned taxpayers to avoid improperly claiming various business tax credits, a common scam used by unscrupulous tax preparers.
Two credits often targeted for abuse by shady tax return preparers are the Research Credit and the Fuel Tax Credit. Each of these credits has specific eligibility criteria.
Each year, the IRS publishes its “Dirty Dozen” list of common scams that taxpayers may encounter any time.
These can peak during the tax filing season as people prepare their tax returns or hire others to help with their taxes.
To combat these scams, the IRS warns people to watch out for suggestions to make improper claims on their tax return.
Selecting a reputable tax professional can also help. The IRS reminds taxpayers that they are responsible for the information on their tax return no matter who prepares it.
Section 41 of the Internal Revenue Code provides a credit for increasing research activities, commonly known as the Research Credit. For more go to irs.gov
