The IRS is warning taxpayers not to fall victim to a new emerging scam involving buying clean energy tax credits.
In this new scam, unscrupulous tax return preparers are misrepresenting the rules for claiming clean energy credits under the Inflation Reduction Act (IRA).
The act's transferability provisions allow the purchase of eligible federal income tax credits from investments in clean energy to offset a buyer’s tax liability.
However, the IRS has observed that some taxpayers, guided by unscrupulous preparers, file returns with purchased clean energy credits they ultimately cannot use.
The scam is generally targeting individuals who file Form 1040. The preparers file returns that have individuals improperly claiming IRA credits that offset income tax from sources such as wages, Social Security and retirement account withdrawals. Read more.