IRS Warns Taxpayers: Social Media Tax Advice Can Spell Trouble and Costly Mistakes
The Internal Revenue Service (IRS) is cautioning taxpayers to be wary of taking tax advice from social media platforms, as part of its ongoing Dirty Dozen series (IR-2023-61). Misleading or inaccurate tax information found online can lead to costly mistakes and even fraudulent activity, putting honest taxpayers and tax professionals at risk.
The IRS has recently identified a number of tax-related schemes circulating on social media. These scams often involve common tax forms, such as Form W-2, or more obscure ones, like Form 8944, which targets a limited, specialized group. In both instances, scammers entice individuals to submit false information in hopes of receiving a refund they’re not entitled to. As IRS Commissioner Danny Werfel warns, “If it sounds too good to be true, it probably is.”
The annual Dirty Dozen campaign is an initiative of the Security Summit, a partnership between the IRS, state tax agencies, and the nation’s tax industry. It aims to raise awareness about tax scams and schemes that can lead to the loss of money, personal information, data, and more. The list includes both new and re-emerging scams, serving as a reminder to taxpayers and tax professionals to stay vigilant.
Examples of recent scams include Form 8944 fraud, where social media posts falsely claim that taxpayers can use this form to receive a refund from the IRS, even if they have a balance due. In reality, Form 8944 is only intended for tax professionals seeking a waiver to file tax returns on paper instead of electronically.
Another prevalent scam involves Form W-2, where scammers encourage taxpayers to use tax software to manually fill out the form with false income and withholding figures. They then instruct individuals to file the fraudulent tax return electronically in hopes of obtaining a large refund. The IRS, along with its Security Summit partners, is actively monitoring for these schemes and working with payroll companies, large employers, and the Social Security Administration to verify W-2 information.
To ensure they are receiving accurate information, taxpayers should consult reliable sources such as IRS.gov, official IRS social media accounts, or other government websites. Those who suspect fraudulent activity or abusive tax schemes can report them to the IRS Lead Development Center in the Office of Promoter Investigations using Form 14242, or submit information to the IRS Whistleblower Office for a possible monetary reward.
Remember, when it comes to tax advice, it’s crucial to verify information and avoid relying solely on social media platforms. Trustworthy sources are key to protecting yourself from scams and costly mistakes.
***Disclaimer: This communication is not intended as tax advice, and no tax accountant -client relationship results**