The Internal Revenue Service (IRS) has issued a consumer alert to warn taxpayers of new fraud involving the use of wage information on tax returns to claim false tax credits.
Scammers are suggesting that people use tax software to manually fill out Form W-2 and include false income information. They tell people to file fake tax returns electronically in hopes of receiving a large refund due to a large amount of tax withheld.
“We are seeing signs of this fraud on the rise. We are concerned that innocent taxpayers may be at risk of falling into a trap that exposes them to financial and criminal penalties.” said Acting IRS Commissioner Doug O’Donnell. “IRS and Security Summit partners remind people that there is no secret way to get free money or big refunds. You shouldn’t try to submit it.”
We are warning people not to fall for these scams and are actively working with payroll companies, large employers and the Social Security Administration to verify W-2 information. The IRS should remind people that there is no secret way to get free money or big refunds, and they should not try to supplement their income and file fraudulent tax returns in hopes of getting huge refunds. I warn you.
The IRS has confirmed two variations of this scheme. One is for people using Form 7202 to claim credits based on the income they earned as an employee, not as a self-employed person. Another involves people trying to make up a fictitious employee employed by a family and using Schedule H to claim reimbursement based on fake illnesses they never paid or family wages. To do. The IRS reminds those who attempt this that they face a wide range of penalties, including a frivolous return penalty of $5,000, and risk criminal prosecution for filing a false tax return.
O’Donnell warns innocent taxpayers could be at risk of falling into traps that expose them to financial and criminal penalties. I am calling people to be careful.
With National Consumer Protection Week soon to begin, the IRS and Summit partners hope to raise awareness and protect taxpayers from these schemes.
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