As Quarter 3 moves forward, now is the perfect time for business owners and S Corporation shareholders to review tax strategies, identify opportunities to reduce taxable income, and plan ahead for a smoother tax season.
This is also the time when many business owners are looking for ways to lower their tax bill — and unfortunately, that makes it prime season for tax scams.
Recently, the IRS issued a major warning about a rise in fraudulent tax credit schemes circulating on social media. These scams target taxpayers by offering false promises of big refunds and instructing people to claim credits they aren’t actually eligible for.
IRS Warning: False Tax Credit Claims on the Rise
According to the IRS, thousands of taxpayers have been misled into filing inaccurate or frivolous returns, leading to:
- Denied refunds
- Hefty penalties and interest
- Increased risk of audits or legal action
The most common credits being abused in these schemes include:
- Fuel Tax Credit – Intended only for specific industries, like agriculture or transportation
- Sick and Family Leave Credit – Meant for certain self-employed individuals, not for all taxpayers
Red Flags to Watch Out For
Be cautious of advice or social media posts that:
- Claim everyone qualifies for a credit, regardless of their business situation
- Promise fast, easy refunds with little documentation
- Encourage you to file amended returns to claim credits you didn’t initially qualify for
- Tell you to ignore IRS notices or submit false information when questioned
The IRS has already assessed over $162 million in penalties related to these schemes.
🔗 Read the full IRS release here
Legitimate Tax Planning Strategies for S Corp Owners
Instead of risking penalties by chasing fake credits, focus on real, IRS-compliant tax strategies that deliver legitimate savings.
During Quarter 3, consider these key actions:
- Review officer compensation – Ensure your salary is IRS-compliant using a tool like Reasonable Compensation Calculated.
- Maximize retirement contributions – Lower taxable income while saving for the future.
- Adjust income and expenses – Strategically time large purchases or income recognition before year-end.
- Verify eligibility for real tax credits – Industry-specific credits can be powerful when correctly applied.
- Stay current on estimated tax payments – Avoid penalties by paying quarterly taxes accurately.
Why Compliance Matters More Than Ever
Falling for a scam or filing inaccurate returns can put your business at serious risk.
By focusing on accurate, documented, and compliant tax strategies, you protect your business while ensuring you keep more of what you’ve earned.
For S Corporation owners, this means paying yourself a reasonable salary supported by documentation — a key factor in avoiding IRS scrutiny. Our RCC tool provides IRS-compliant reports you can use to confidently set officer compensation.
Take Action This Quarter
Quarter 3 is a critical window for proactive tax planning.
Avoid shortcuts and focus on smart, compliant tax moves that will save you money and reduce stress when tax season arrives.
The best strategy is one that’s legal, documented, and built for long-term success.
Next Step:
Don’t wait until year-end to get organized.
Use our RCC tool to generate your IRS-compliant officer compensation report and build a strong foundation for tax planning.
🔗 Learn more about Reasonable Compensation Calculated
