The IRS warns of dangerous new tax scam that involves W-2 forms. “We worry that innocent taxpayers could be at risk of being tempted into falling into a trap,” The acting IRS commissioner Doug O’Donnell said.
The IRS Warns Of Dangerous New Tax Scam
The IRS is now warning the general public of a new tax scam this very season and this is including one that is encouraging people to defraud the government. There was over $5.7 billion in tax fraud in the year 2022 alone according to the IRS, and illicit schemes already are proliferating in 2023.
On very format that is now making waves on social media platforms tells people to fill out a W-2 form manually with false income information in a bid to score a large refund.
And according to a March 3 IRS bulletin, filers are even encouraged to invent large incomes and withholding figures thus making up a fictional employer, and then electronically submit a return in the hope of getting as much as five figures back from the big Uncle Sam
Variations of the New Tax Scam
One notable version of the ploy is directed at self-employed people who have claimed credits for family leave or sick leave making use of Form 7202. The fraudsters even urge them to claim a credit that is based on income earned as a salaried employee. These sets of credits were available for 2020 and 2021 returns in a bid to help these people that are impacted by COVID-19 but however are no longer applicable.
Another variation as you should know tells people to make up household workers and then try to claim a refund based off on sick leave and family wages that they never paid out making use of a Schedule H or Form 1040.
What the Acting IRS Commissioner Has To Say About the Play of Events
“We worry that innocent taxpayers could be at risk of being tempted into falling into a trap that puts them at risk of financial and criminal penalties,” the acting IRS Commissioner Doug O’Donnell in a statement said.
The agency said at the very least, submitting false tax paperwork can result in a $5,000 fine for a frivolous tax return penalty. But also as people should know, there is the risk of criminal prosecution.
“People should not make up income and try to submit a fraudulent tax return in hopes of getting a huge refund,” O’Donnell stated. “There is no secret way to get free money.”