As National Tax Security Awareness Week unfolds, the IRS and its Security Summit partners are alerting taxpayers to the increasing dangers of fraudulent tax advice spreading on social media.
With the tax season fast approaching, influencers and scammers alike are enticing individuals to engage in risky, and often illegal, tax practices. Staying informed could be the difference between a smooth filing process and an audit nightmare.
The Rise of Dangerous Tax Advice on Social Media
In today’s fast-paced digital world, social media platforms have become breeding grounds for misinformation, including harmful tax advice.
The IRS has observed a concerning rise in posts promoting misleading tax strategies under trending hashtags, especially aimed at gig workers, small business owners, and middle-class families. These schemes promise substantial refunds but come with severe risks.
Examples of Trending Misinformation
Many influencers share these tips under the guise of “tax hacks” that sound too good to be true. Here are two common schemes that have been gaining traction:
- Promoters encourage taxpayers to misuse legitimate IRS forms to claim non-existent credits.
- Influencers suggest inflating income figures to increase refunds, often resulting in audits.
Scams to Watch: Common Frauds Uncovered
1. Self Employment Tax Credit Scam
Scammers promise up to $32,000 in refunds using a fictitious “Self Employment Tax Credit.” They advise misusing Form 7202, which was only valid for specific COVID-19-related credits in 2020 and 2021. Filing this now is not only incorrect but can lead to penalties.
2. Falsified Household Employment Tax
This scam involves taxpayers inventing fictional household employees to claim false sick leave credits on Schedule H (Form 1040). Victims often don’t realize this can trigger federal investigations and hefty fines.
Scam Type |
Misused Form |
Potential Penalty |
|---|---|---|
| Self Employment Tax Scam | Form 7202 | Audits, fines, and prosecution |
| Household Employment Tax | Schedule H (Form 1040) | Federal criminal charges, fines |
3. Fuel Tax Credit Fraud
Targeting everyday taxpayers, this scam exploits the Fuel Tax Credit, designed for specific industries like farming. Misleading claims advise ordinary citizens to file for this business-specific credit, resulting in both denied refunds and legal consequences.
CASST and the Fight Against Fraud
To tackle the surge in fraudulent tax advice, the IRS and its Security Summit partners have formed the Coalition Against Scam and Scheme Threats (CASST).
This public-private alliance includes tax professionals, financial institutions, and government agencies dedicated to combating these scams.
CASST’s Threefold Approach
- Raising Awareness: Regular updates on emerging scams.
- Public-Private Collaboration: Engaging tech and financial sectors to trace and block fraudulent activities.
- Resource Development: Educating taxpayers through webinars, social media campaigns, and guides available on IRS.gov.
Protect Yourself: Smart Tax Filing Practices
Identify Reliable Sources
Not all online advice is bad, but it’s essential to verify sources. Trust only established tax professionals or official IRS platforms. Here’s how you can ensure your information is accurate:
- Visit IRS.gov for trustworthy resources.
- Follow verified IRS social media accounts for updates.
Seek Professional Help
When in doubt, consult a certified tax professional. Applying unverified advice could lead to:
- Delayed refunds.
- Possible audits or penalties.
Staying Vigilant in Tax Season
As the 2025 tax season approaches, misinformation will likely spike. Scammers will intensify their efforts, promising “easy money” through questionable deductions and credits. Taxpayers should remain skeptical of advice that sounds too good to be true.
For safe, accurate tax filing, rely on reputable sources and consult professionals when necessary. Protecting your financial future starts with informed decisions and avoiding risky shortcuts. Stay safe, and ensure your tax season is stress-free by trusting verified guidance.
