The IRS is warning taxpayers of a scam involving clean energy tax credits. Under the Inflation Reduction Act (IRA), taxpayers can purchase tax credits for eligible investments in clean energy to offset income tax liability. The IRS has seen an increase in Forms 1040 filed by unscrupulous tax return preparers with purchased clean energy credits that the taxpayers aren’t entitled to claim. Individuals purchasing tax credits under the IRA are subject to the passive activity rules. Generally, this means they can only use purchased credits to offset income tax from a passive activity. Most taxpayers don’t have passive income and a passive income tax liability. For details: https://bit.ly/4bzeUoS
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