Excessive fuel tax-credit claims
As any motorist can attest, Uncle Sam collects taxes on gasoline, diesel and other types of fuel. However, some commercial uses of these fuels are nontaxable.
Such tax-free fuel circumstances include the use of farm equipment, certain boats, trains and airplanes. In some cases, individuals and businesses that purchase fuel for one of those purposes can even claim a tax credit.
That possibility has led to improper claims for the fuel tax credit and earned it a place on the IRS' 2015 Dirty Dozen tax scams list.
The false fuel tax-credit claims generally come in 2 forms, says the IRS. An individual or business may make an erroneous claim on their otherwise legitimate tax return. Or an identity thief may claim the credit in a broader fraudulent scheme.
The IRS says the filters in its tax processing software have prevented a significant number of questionable tax credit claims from going through. The IRS has taken additional steps to identify returns for review that claim fuel tax credits.
"We will do everything we can to stop erroneous claims for the fuel tax credit and catch scammers promoting them," says IRS Commissioner John Koskinen.
Remember that when you fill up your car.