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By Gian Pazzia | Chairman & Chief Strategy Officer
According to the U.S. Senate Committee on Finance website posted on April 15, 2025, the IRS has confirmed that so-called “tribal tax credits” or “Native American Income Tax Credits” being sold by several promoters are fraudulent. Senators Ron Wyden (D-OR) and Catherine Cortez Masto (D-NV) are calling for a criminal investigation after reports surfaced that a public company and its affiliates used the identities of Native American tribes without consent to sell investors on non-existent tax credits.
KBKG Insight:
This scheme raised immediate red flags and when presented to KBKG, we investigated the claims thoroughly, warning clients to steer clear. Tax professionals should exercise heightened due diligence when evaluating tax credit opportunities that sound too good to be true. In this case, the lack of transparency and verifiable legal support was a clear warning sign. If signing a tax return, advisors have a responsibility to protect their clients from exposure to fraudulent tax schemes by verifying the legitimacy of any incentive before proceeding. Click here for more background on KBKG’s due diligence.
Background
The Senate Finance Committee revealed the names of firms who made millions promoting fake “tribal tax credits,” claiming they were authorized under the Indian Self-Determination and Education Assistance Act (ISDEAA). These firms allegedly misused tribal identities to mislead investors and falsely claimed the credits were registered with the Department of Treasury.
Promoters assured investors the credits could offset federal income taxes dollar-for-dollar. However, the IRS explicitly confirmed to the Senate Finance Committee that no such credits exist and that promoters and taxpayers claiming them may face civil or criminal penalties.
Further, filings show the company in question claimed access to $64 billion worth of credits and falsely stated it had agreements with tribes like the Cherokee Nation—who promptly issued a cease and desist.
KBKG Insight:
This case is a timely reminder for CPAs and taxpayers to be especially wary of emerging or obscure credit schemes that sound too good to be true. Always consult with a trusted expert with a proven track record before moving forward with any tax strategy.
Conclusion
With the IRS confirming these “tribal tax credits” are fraudulent, and with the Senate calling for criminal prosecution, it’s imperative for businesses and advisors to scrutinize all third-party tax credit offerings—particularly those not explicitly supported by IRS guidelines or code.
Action Steps
For legitimate ways to maximize tax savings—backed by IRS guidance—explore KBKG’s specialty services like Cost Segregation, 179D Energy Tax Deductions, R&D Credits, 45L Energy Tax Credits, Section 48 Tax Credits, Transfer Pricing and more.
KBKG and its experts specialize in navigating complex tax legislation and translating policy shifts into practical, strategic solutions. Those with questions about current tax incentives and benefits are encouraged to contact a KBKG expert today.
About the Author
Gian Pazzia | Chairman & Chief Strategy Officer
Gian P. Pazzia is currently the Chairman & Chief Strategy Officer at KBKG and oversees all strategic initiatives for the company. He has over 25 years of experience in the specialty tax industry. He is a recognized leader in the cost segregation field serving as a former President (2013-2015 term) of the American Society of Cost Segregation Professionals… Read More