IRS Warns Taxpayers Against Misleading Social Media Tax Advice

The IRS is cautioning taxpayers about the dangers of false tax advice circulating on social media platforms, which can lead to penalties, audits, and criminal charges.

Key Focus: Misinformation and Consequences

1. Social Media Scams: Misleading guidance on platforms like TikTok and Facebook.
2. IRS Warning: Cautions against incorrect returns, identity theft, and tax fraud charges.
3. Agency Focus: Shifting to address viral tax misinformation.

IRS Warns of Social Media Scams Targeting Taxpayers

The IRS is actively addressing the spread of misleading tax strategies online.

Agency Efforts

1. Scammer Tactics: Exploiting tax season to trick taxpayers.
2. Risks Highlighted: Identity theft and claiming ineligible tax credits.
3. Increased Misinformation: Rise of viral tax advice on social media.

How Bad Tax Advice Can Lead to Trouble

Following incorrect online advice can have severe repercussions.

Potential Issues

1. Fraudulent Returns: Claiming false deductions, credits, or refunds.
2. Identity Theft: Providing personal information to scammers.
3. Incorrect Tax Filings: Delays, penalties, or tax investigations.

Viral Tax Myths Debunked

The IRS is addressing specific fraudulent schemes that are gaining traction online.

Common Scams

1. The Fake “Self-Employment Tax Credit”:
   1. False claims of a special credit related to COVID-19.
   2. Clarification: No such credit exists.
   3. Risk: Severe penalties for claiming a nonexistent credit.
2. Employee Retention Credit (ERC) Fraud:
   1. False claims of eligibility for most taxpayers.
   2. Clarification: The ERC is for businesses, not individuals.
   3. Risk: Legal consequences for fraudulent claims.
3. W-2 Form Fraud:
   1. Encouraging manipulation of W-2 forms for inflated refunds.
   2. Risk: Criminal charges for claiming fraudulent refunds.

How to Avoid Falling for Tax Scams

Taxpayers should follow these guidelines to protect themselves.

Recommended Actions

1. Reputable Sources: Rely on IRS website, certified tax professionals, or licensed CPAs.
2. Skepticism: Be wary of viral tax strategies that seem too good to be true.
3. Information Security: Never share personal financial information on social media.
4. Verification: Double-check tax credits and deductions.
5. Reporting: Report suspicious tax schemes to the IRS using Form 3949-A.

Consequences of Filing a Fraudulent Return

Filing a false return can lead to serious penalties.

Potential Penalties

1. Civil Penalties: Fines and interest charges.
2. IRS Audits: Additional tax liabilities.
3. Loss of Benefits: Loss of future tax credits and deductions.
4. Criminal Charges: Prison time for tax fraud.

Final Thoughts: Prioritize Official Guidance

1. Internet Dangers: Unverified sources can lead to serious consequences.
2. Official Guidance: Trust only IRS guidance and qualified professionals.
3. Education and Vigilance: Informed decision-making is crucial.

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