IRS Issues Stern Warning to Illinois Residents about Tax Credits

There are few organizations in the world more feared than the Internal Revenue Service. They're like the strict parent that you don't want to tick off. That's why many in Illinois are now concerned about stern warnings being issued to residents of the state about illegitimate tax credits being claimed.

Many may have missed this bulletin issued by the Internal Revenue Service since it was issued just prior to the Fourth of July weekend on July 3, but it's serious business. It's a warning to those in Illinois and many other states where they're seeing a scam where unscrupulous tax preparers are advising citizens to claim a "clean energy tax credit" which many are not eligible for.

Specifically, the IRS is warning Illinois residents about the Inflation Reduction Act which "enable the purchase of eligible federal income tax credits from investments in clean energy to offset a buyer’s tax liability". The scam is being targeted at the many in Illinois that file Form 1040. Here's their exact warning:

"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".

What can you do if you've filed your income tax in Illinois and believe you've been scammed by this energy tax fraud?

The scam is so common in Illinois in particular that the IRS has set up an online form to report this problem. You can check out the full bulletin for more specifics about how many in Illinois are being deceived by this new tax scam.