Unlawful tax return preparers may take advantage of legitimate credits by applying them in cases where they are not applicable.
That goes for two credits, in particular: the investigation credit and the fuel tax credit, according to the IRS.
The research credit is aimed at forward individuals to invest in research. But some tax filers stretch the credit to interview to unqualified research or research expenses.
The fuel tax credit was created for off-highway and husbandry uses. Most taxpayers are not eligible to use it, yet it still shows up erroneously on some restorations.
Misusing both credits will result in penalties.
Take note: If your tax preparer makes the incongruous claim, you, the taxpayer, are still on the hook to pay the consequences.