IRS Warns a $1 Million ‘Tribal Tax Credit’ Being Sold for $250,000 Doesn’t Exist

The IRS says federal “Tribal Tax Credits” being promoted to taxpayers don’t exist, despite offers claiming buyers can purchase $1 million in credits for roughly $250,000. Taxpayers remain responsible for false credits claimed on their returns. Lisa F. Young/Shutterstock

An offer to buy $1 million worth of federal tax credits for around $250,000 might sound like an unusual tax-planning opportunity available only to wealthy investors. According to the Internal Revenue Service, it’s actually a warning sign of a tax scheme involving credits that don’t exist.

The Internal Revenue Service issued a Sept. 18 warning about promoters marketing fake tax benefits under names including “Tribal Tax Credits,” “Native American Tax Credits” and “Sovereign Tribal Tax Credits.”