I’ve had plenty of Long Island clients over the years come to me in a terrible position with their taxes because they trusted the wrong person’s advice or fell prey to a scam… or both.
In fact, the third most commonly reported fraud is tax refund fraud, and every year millions of suspicious tax season activities are reported.
The tough thing is, when money is thin and tax time rolls around, the possibility of owing Uncle Sam can hang heavy over your head. That kind of feeling can make any “get a bigger refund” ad a difficult lure to resist.
But, the IRS is wise to those schemes and (like the Pierre-Louis & Associates CPA, P.C. team) they work hard to make sure you are too. Enter the annual Dirty Dozen list. Right now, the IRS is in the middle of sharing this year’s list — one of the most recent ones is a scam I want to highlight because I’m seeing the effects of it firsthand: Scam #8 — Bad tax advice on social media.
There’s a whole feed of TikTok videos, Instagram Reels, and Facebook posts trying to pull you in with advice about everything from health to skincare to nutrition… and now, tax advice.
Currently, there are two specific tax scams around the misuse of tax forms that are spreading all over social media platforms:
1. Fabricating income to falsely claim large refunds or withhold income
Taxpayers are being encouraged to fraudulently claim a 2020/2021 era tax credit for self-employed individuals when they are an employee (Form 7202 — Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals). Or they are encouraged to invent fictional household employees so they can claim a refund for sick and family medical leave wages (Schedule H — Household Employment Taxes).
2. Misusing the hardship waiver request
There’s a Form 8944 (Hardship Waiver Request) scheme that’s been circulating the social media feeds, encouraging a variety of misuse claims including trying to get a refund even if you owe taxes. While this is a real IRS form, it is for tax professional use only — NOT for taxpayers to avoid tax bills. Tax preparers use this to request a waiver which enables them to file tax returns on paper instead of electronically.
Now, even if the videos you’ve seen aren’t encouraging scammy actions, even the best intentioned tax advice clips can still land you in a whole lot of trouble.
These videos are created to get likes for influencers who are usually not professionals who understand the world of taxes. The reality is that the tax code and the rules around taking credits and deductions are often nuanced. A 15-30 second video (even a 3-minute clip in some cases) just can’t explain all of those details well.
So, when you come across a video giving you tax advice, ALWAYS double-check that information on irs.gov or consult a trustworthy Suffolk County professional you trust. As someone who looks out for my Long Island clients to help them resolve their IRS problems, I also urge you to vet any tax advice you get from an outside source.
It never hurts to check, but it’ll be another kind of pain if you don’t.
Let social media be your place to unwind. Not your place to get tax help. That’s what I’m here for:
Stay safe,
Frantz Pierre-Louis