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