Tax season is underway in the United States. It’s not our favourite season, but we don’t like anyone to have a bad time either. Therefore, the IRS (Internal Revenue Service) has issued a serious warning: be careful with the advice offered by some social media influencers about tax returns, as it could lead to unintentional tax fraud.
It may seem like a rather crude warning, but every year, thousands of people fall into traps promoted by influencers and online “experts” who claim to know shortcuts to paying less tax or receiving larger refunds. Never trust them! This type of advice can not only cause financial problems, but could also lead to criminal charges. And none of us want that. We’ll tell you everything you need to know so that nothing can get in your way this tax season!
We’re going to list the most common mistakes we’re seeing on social media.
W-2 fraud
One of the most widespread scams on social media is about inflating income and altering information on the W-2 form to get a larger refund. Some people even falsify information about their employer or the taxes withheld in the hopes of receiving more money from the IRS.
Fake form 7202
This document allows certain self-employed workers to claim credits for medical or family leave (especially sick leave). But some people on social media have promoted the use of the form among people who aren’t eligible, so be careful, as you could be committing a crime.
False returns by household employees (Schedule H)
Yes, believe it or not, some people file returns indicating they have employees in their household and report fictitious payments to receive improper tax credits… Remember that this type of fraud is easily detectable and can result in severe penalties.
Form 8944 fraud
This document is designed for professional tax preparers who need to request an exception to filing returns on paper instead of electronically.
What happens if I commit tax fraud?
The IRS is clear in its warning: falling for these scams can have serious legal consequences, although everything depends on the severity of the violation. The most common fines and consequences are:
- Pensions of up to $5,000 for filing false information.
- Audits and detailed reviews of past returns.
- Criminal charges and possible prison time in cases of serious fraud.
If the IRS determines that someone has intentionally committed fraud, the penalties can be devastating, including seizure of bank accounts and assets!
Avoiding problems with the IRS isn’t that difficult.
We’ll outline some steps you can take to avoid falling into malicious temptations. The easiest way is to obtain information through official IRS channels. Although social media may seem helpful, consult with someone qualified to do so or directly on the official IRS website.
On the other hand, never assume you’re going to get inflated refunds, it’s the IRS!
Report suspicious activity (whether you see it online or if someone offers you a trick) and review your information before filing your return to make sure everything is in order.
We all form the IRS, and so do public services. Besides, it’s very difficult not to catch someone trying to cheat the system. Let’s be honest!