The Department of Revenue is processing 2023 income tax returns. For more information, please read the Department's announcement.

 
1

Promoters of False Fuel Tax Credit Claims

#FFFFFF

Number four on the 2023 Dirty Dozen list of tax scams comes with warnings of third-party promoters of false fuel tax credit claims. False promoters try to push taxpayers to claim fuel credits they are not qualified to receive. 

During tax season, it’s important to remember to be wary of any tax deal that sounds too good to be true. IRS Commissioner, Danny Werfel said, “These scammers will often charge a hefty fee for these bogus claims, and participants also face the possibility of identity theft.” Always think twice when you see promotions for fuel tax credits, especially when they come from an unknown third party source. 

The fuel tax credit is meant for off-highway business and farming use, which makes most taxpayers not qualified to receive this credit. The IRS has seen a rise in scammers enticing taxpayers to inflate their refunds by claiming the credit. Promotion of filing certain refundable credits using Form 4136, Credit for Federal Tax Paid on Fuels has increased due to false perpetrators. 

In this scam, it is commonly seen that a third party will convince a taxpayer to fraudulently claim the fuel tax credit with promises of an enticing increase on their return. During their persuasion, these scammers will take advantage of taxpayers with inflated fees, refund fraud and even identity theft. 

It is suggested that taxpayers seek advice from a legitimate source before claiming credits such as the fuel tax credit as the IRS has increased its compliance efforts related to falsely claiming these credits. 

To report suspected tax fraud to the Colorado Department of Revenue, please send us an online request through our Report Possible Tax Refund Fraud form or fill out a Citizen Informant Report and submit it to the address on the form. 

To report incidents of tax fraud to the Federal Internal Revenue Service (IRS), complete the IRS Form 3949A and submit it to the address listed on the form. If you have questions, you may call the IRS Helpline at (800) 829-1040. 

For more frequently asked questions regarding reporting tax evasion and fraud, please visit our website at https://tax.colorado.gov/report-tax-evasion-fraud