Misleading and Inaccurate Tax Information Circulating on Social Media

Social media platforms have made it easier than ever to stay in touch with family and friends and to keep abreast of the latest news. Unfortunately, these platforms are also used for more nefarious purposes, like spreading false and misleading tax information to the public, which in turn can lead to tax issues and even identity theft. Some tax scams spread on social media, for instance, urge people to misuse their tax documents by submitting false or incorrect information as a way to get refunds. Such tactics can result in significant civil and criminal penalties for the taxpayer.

Social Media Platforms are Not a Reliable Source of Tax Information 

There are a lot of helpful resources on the internet that can assist taxpayers come tax season. Social media platforms, however, do not fall under this category. Many unscrupulous individuals use these platforms to extract sensitive information and even funds from unsuspecting taxpayers. For this reason, taxpayers are being encouraged to be wary of filing season hashtags and certain tax-related social media topics, both of which can provide fraudulent and inaccurate information.

Fraudulent Advice on Form W-2 

One of the most common schemes that circulated on social media this year encouraged taxpayers to use special software to manually complete their W-2s and to include false information about their incomes while doing so. There are two main variations of this W-2-based scheme, but both aim to have taxpayers misuse their W-2 wage information to generate a bigger refund and include the use of:

• Fraudulent Form 7202, which encourages taxpayers to use this form to claim a credit based on income earned as an employee despite a taxpayer’s status as self-employed (which were only available during the pandemic); and
• Fraudulent Schedule H, which urges taxpayers to fabricate household employees and then attempt to claim a refund based on family medical leave wages that weren’t actually paid.

Unfortunately, the W-2 scheme is not the only tax-related scam on social media.

Fraudulent Form 8944 Scheme 

Besides the fraudulent W-2 scams, many social media posts are making inaccurate claims about Form 8944, or the Preparer e-file Hardship Waiver Request. There are many incorrect claims being made about this form, including that taxpayers can use it to obtain a refund even if they owe a balance to the IRS. This form, however, is to be used only by tax professionals who are requesting a waiver so that they can file returns on paper rather than electronically and is not a form that most taxpayers can use simply to avoid paying a tax bill.

Reach Out to Us by Phone or Online Message 

If you suspect that you have been given bad advice about your taxes and may have committed fraud, you need to speak with an attorney right away to avoid civil and criminal penalties. Call CPA, former FBI Special Agent, and Florida tax attorney Ronald Cutler, P.A. at 386-490-9949 to get started on your case.

Sources: 

irs.gov/newsroom/dirty-dozen-taking-tax-advice-on-social-media-can-be-bad-news-for-taxpayers-inaccurate-or-misleading-tax-information-circulating

irs.gov/newsroom/dirty-dozen