The IRS warns taxpayers that “Tribal Tax Credits” and similar promotions are fake ahead of the Oct. 15 extension deadline. Claiming one can lead to the proper tax being assessed, plus penalties and interest, and potentially fines or imprisonment.
The IRS says promoters may claim a confidential agreement with the Treasury Department or tribal governments, or say tribal trust-fund payments can become federal credits; the agency says no such agreement exists. Some promoters cite clean-energy credit transfer rules or the New Markets Tax Credit under Section 45D, but the IRS says these have no relationship to the fake credits.
Tax professional Tom O'Saben said a processed return or issued refund does not prove the credit is valid. He said a legitimate credit should be tied to a specific Internal Revenue Code provision and clear eligibility rules. The IRS lists pressure to act quickly, unusually large refund promises and requests for nondisclosure agreements before basic information as warning signs. Suspected abusive promotions can be reported using IRS Form 14242 or at IRS.gov/SubmitATip.
