Megan L. Brackney and Melina Watson guest authored an article for the Procedurally Taxing Blog entitled “Neo-TikTok-Tology,” about the challenges associated with receiving tax advice from purported experts on the social media platform TikTok. In addition to discussing the range of good and bad tax advice available on TikTok, the article addresses the question of “if a taxpayer relies on advice from TikTok that turns out not to be correct, and ends up with an adjustment of their tax liability, can the taxpayers rely on that advice as a reasonable cause defense to accuracy penalties?”
The blog post notes:
As people rely more on social media sources, such as TikTok, for news and information, and the number of qualified, affordable, and available tax professionals continues to decrease, have we reached a point where reliance on tax advice from TikTok could be reasonable cause? When I have asked this question, the reaction of my fellow tax practitioners has been, “no way!” Instead, they say, taxpayers should obtain advice from tax professionals. This is great advice, in theory, but it is becoming more difficult for taxpayers of limited financial means to find affordable and qualified tax professionals who will provide any better advice than what they can get for free on TikTok.
TikTok is one of the many social media platforms that have attracted people seeking free financial advice. This tax season, the hashtag “#taxes” has received increased engagement on TikTok, and according to the platform’s analytics has over 500 million views and 44,000 posts. Posters on TikTok range from CPAs and other tax practitioners to scammers, and while there is quality advice available on TikTok, scams, hacks, and “secret techniques” are being posted, promising higher returns or fewer taxes owed, which may appeal to lower-income taxpayers and those who cannot consult a credentialed paid tax preparer or expert. The IRS has even included social media tax advice on its “Dirty Dozen” list for 2023, as this Tax Notes (paywall) article from a few weeks ago discusses.
The full blog post can be found here.
Previously, Megan has written about the “The IRS’s Aggressive Enforcement Of Foreign Information Return Penalties Has Created Ethical Dilemmas For Practitioners” for Procedurally Taxing.