4 Influencer Tax Myths That Could Cost You Big If You Believe Them
In its most recent annual report to Congress, the National Taxpayer Advocate (NTA) called social media a “negative tax influence” that “harms taxpayers” and listed influencer-fueled tax mythology as one of the top 10 most serious problems facing modern filers.
It urged the IRS to adapt its successful anti-ghost preparer initiatives and tactics to identify unscrupulous online influencers who peddle misinformation for clicks and exploit the complexities of the tax code and widespread tax illiteracy to mislead followers with dubious claims about secret hacks and insider strategies that don’t work, are illegal or can land their followers in financial or legal trouble.
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In 2025, the IRS assessed more than 32,000 penalties totaling $162 million for improper claims inspired by social media misinformation. Protect yourself in 2026 by avoiding these influencer tax myths.
The Self-Employment Tax Credit
The NTA called out a myth that has become so prevalent that the IRS listed it among its annual Dirty Dozen tax scams: a nonexistent self-employment tax credit that influencers cite while urging taxpayers to file inaccurate returns in pursuit of illegitimate refunds.
While the self-employed pay an extra tax to cover Social Security and Medicare funding, the NTA insists a corresponding credit “exists only on social media.”
Tribal Tax Credits
In 2025, the United States Senate Committee on Finance urged the IRS to launch a criminal investigation into promoters selling bogus credits through what they claim are connections to sovereign tribal bodies.
They claim the credits can dramatically reduce your federal tax liability, but the fraud is based on a myth about the existence of so-called Native American Federal Income Tax Credits or Sovereign Tribal Tax Credits — no such credit exists.
Fuel Tax Credit
The University of Maryland Robert H. Smith School of Business cautions against a scam flooding TikTok that comes with a simple pitch, such as, “Did you pay for gas this year? The government owes you money!”
Like many of the most stubbornly enduring myths, this one has a kernel of truth. The tax code provides some fuel credits to qualifying farmers and other off-highway businesses, but commuters and road trippers can’t seek compensation for gas they buy for their personal vehicles, yet the myth endures — so many such claims have flooded the IRS that the agency had to issue new paperwork.
The Exaggerated Withholding Myth
The NTA warned about an “emerging” scheme on social media that highlights the danger of relying on social media personalities — regardless of the experience or certifications they claim to have — for tax guidance.
In this case, influencers urge taxpayers to incorrectly overstate their withholdings to lower their tax bill or increase their refunds. Some say it’s legal. Others claim that a loophole that will soon be closed currently allows it. However, the practice is illegal and can lead to the IRS freezing your entire refund, levying significant penalties or even launching a criminal investigation, regardless of whether the taxpayer believed it was OK.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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