How to Recognize the Biggest Social Media Tax Scams

Social media platforms, especially TikTok, have become ground zero for sophisticated tax fraud schemes that make old-school scams look quaint by comparison.

The current tax fraud epidemic represents a perfect storm of sophisticated technology, social media manipulation and widespread financial desperation. Scammers are using artificial intelligence (AI) to clone voices, social media to build trust and just enough real tax knowledge to sound credible while leading people off a cliff. The Internal Revenue Service earlier this month announced that it assessed $162 million in penalties over false tax credit claims tied to social media.

Beware especially of three scams running wild in 2025:

1. The "Fuel Tax Credit" Gold Rush
This is the crown jewel of current tax fraud. "Experts" on social media are telling people they can claim thousands of dollars through the Fuel Tax Credit by simply buying gas. The pitch sounds simple: "Did you buy gas this year? Congratulations, you're owed money!"

Reality check: The Fuel Tax Credit is designed for farmers and businesses that use fuel for off-highway purposes: think tractors, construction equipment or aviation fuel. It's not for your Honda Civic's daily commute. But scammers have convinced thousands of regular people that buying gas for their regular car somehow qualifies them for these credits.

The IRS has been so overwhelmed by false fuel tax credit claims that it created the "Statement Supporting Fuel Tax Credit Computation" form just to make people prove they're eligible. 

2. The "Fake W-2" Fantasy
This scam is breathtakingly brazen. Social media gurus are literally teaching people to create fictional W-2 forms using tax software, complete with made-up employers and inflated withholding amounts. The logic, if you can call it that, goes like this: "If you create a W-2 showing you earned $100,000 and had $50,000 withheld, the IRS will send you a $50,000 refund!"

It's like believing you can write yourself a check from Fort Knox and the government will honor it. The IRS verifies every W-2 with actual employers. When they can't find your fictional company, your refund gets frozen, and you get a very unpleasant letter from people with badges.

3. The Self-Employment Tax Credit That Doesn't Exist
This might be the most insidious scam because it preys on people who genuinely struggled during the pandemic. Promoters are marketing a nonexistent "Self-Employment Tax Credit" that supposedly pays up to $32,000 to gig workers and freelancers for COVID-related hardships.

The truth is, there are legitimate sick leave and family leave credits for self-employed individuals—but only for 2020 and 2021, with very specific requirements. Most people don't qualify, and the IRS is scrutinizing every claim. These scammers are essentially selling lottery tickets for a lottery that ended years ago.

The AI Twist Making Everything Worse
Just when you thought social media tax scams couldn't get more advanced, now the IRS is dealing with AI-powered voice cloning scams targeting taxpayers.

Scammers harvest voice samples from your social media videos (remember that TikTok where you sang along to your favorite song?), use AI to clone your voice, then call your family members pretending to be you in tax trouble. Imagine your elderly parents getting a call from what sounds exactly like you, crying that you're in jail for tax fraud and need them to buy gift cards to pay the IRS immediately.

The technology has gotten so good that it only takes about three seconds of audio to create a convincing voice clone. As one cybersecurity expert put it, scammers can now "clone nearly anyone" with just a short audio clip.

IRS's Uphill Battle
The IRS is fighting a war on multiple fronts, and is playing catch-up with technology that evolves faster than government bureaucracy. The agency has designated these social media-driven schemes as “listed” in the IRS Dirty Dozen scam alert.

But by the time the IRS identifies and lists a scam, scammers have already moved on to the next variation. It's like trying to nail Jell-O to a tree while the Jell-O keeps changing flavors.

The agency has also ramped up criminal investigations. The IRS’s Criminal Investigation Division is "always on the lookout for promoters and participants of these types of schemes," and it’s not just going after the big fish. Regular taxpayers who knowingly file fraudulent returns can face both civil penalties and criminal charges.

Ghost Preparer Problem
Adding another layer to this mess are "ghost preparers"—tax professionals who prepare returns for fees but don't sign them or provide their official preparer identification numbers. These shadowy figures often push the social media scams, collect their fees, and then disappear when the IRS comes knocking, leaving taxpayers holding the bag.

The IRS is now sending letters to taxpayers whose returns appear to have been prepared by ghost preparers, essentially saying, "Hey, we noticed your return was probably done by someone sketchy. You might want to double-check what they filed for you."

Red Flags That Should Make You Run
If you see any of these phrases in tax advice on social media, treat them like a fire alarm:

• "Secret tax credit the government doesn't want you to know about"
• "Get thousands back for buying gas/having a job/breathing air"
• "The IRS owes you money from COVID"
• "Everyone qualifies for this"
• "Just make up a W-2 and see what happens"
• "Fake it till you make it" (regarding any tax documents)

If someone's tax advice requires you to lie, fabricate documents or claim you did things you didn't do, that's not tax planning—that's fraud with extra steps.

The Bottom Line for Taxpayers
If someone on social media claims to have discovered a secret way to get thousands of dollars from the IRS, they're either lying or selling you a ticket to an audit. Real tax strategies are boring, complicated and usually involve lawyers who charge more per hour than most people make in a week.

The government isn't hiding money from you in secret tax credits. The IRS isn't your enemy, but it’s definitely not your ATM. And if something sounds too good to be true—especially if it comes with background music and flashy graphics—it probably is.

If you've fallen for any of these schemes, tax professionals recommend getting into compliance voluntarily before the IRS comes calling. Because in this game of tax fraud whack-a-mole, the house always wins, and the taxpayers always pay—one way or another.

Samuel Handwerger is a full-time lecturer in the accounting and information assurance department at the University of Maryland’s Robert H. Smith School of Business. He serves as faculty advisor to UMD’s Financial Wellness Center and the UMD-affiliated nonprofit organizations Justice for Fraud Victims and TerpTax, which provides free tax preparation services for low- to mid-income individuals in the community.