On 3/20/23, the IRS launched its 2023 “Dirty Dozen” list with new warnings each day about common scams taxpayers (individuals and business) should avoid. Some items on the Dirty Dozen list are new, and some make a return visit. The Dirty Dozen is intended to alert taxpayers and the tax professional community about various scams and schemes at large. Of particular interest this year and new to the list is “taking social media tax advice”. IRS is issuing a warning regarding trusting social media tax advice that can lure taxpayers and tax professionals into compromising tax situations. Consequently, putting taxpayers and the tax professional community at risk of losing money, personal information, data and more. That said, taxpayers who intentionally file forms with false or fraudulent information can face serious consequences, including potentially civil and criminal penalties.
Inaccurate social media tax advice can lead to fraud via schemes that encourage people to submit false, inaccurate information in hopes of getting a refund
Unfortunately, fraudulent form filing, and bad advice is trending on social media platforms . “The IRS is aware of various filing season hashtags and social media topics leading to inaccurate and potentially fraudulent information. The central theme involves people trying to use legitimate tax forms for the wrong reason.”
Here are just two of the recent schemes circulating online:
Form 8944 fraud
Fraudulent form filing involving Form 8944, Preparer e-file Hardship Waiver Request. Form 8944 is an IRS form that is for a targeted group of tax return preparers who are requesting a waiver so they can file tax returns on paper instead of electronically. It is not in any way a form the average taxpayer can use to avoid tax bills. IRS states that Form 8944 is a specified tax return – preparers use this form to request an undue hardship waiver from the section 6011(e)(3) requirement to electronically file returns of income tax imposed by subtitle A on individuals, estates, and trusts. Social media posts are claiming that Form 8944 can be used by taxpayers to receive a refund from the IRS, even if the taxpayer has a balance due. This is false information. Form 8944 is for tax professional use only.
Form W-2 fraud
This scheme, which is circulating on social media, encourages people to use tax software to manually fill out Form W-2, Wage and Tax Statement, and include false income information. In this W-2 scheme, scam artists suggest people make up large income and withholding figures as well as the employer it’s coming from. Scam artists then instruct people to file the bogus tax return electronically in hopes of getting a substantial refund. Note that the IRS, along with the Security Summit partners in the tax industry and the states, are actively watching for this scheme. In addition, the IRS works with payroll companies and large employers – as well as the Social Security Administration – to verify W-2 information.
Remember – If something sounds too good to be true, it probably is!
Who is your professional tax advisor? ©
