The Internal Revenue Service (IRS) is warning taxpayers about new scams that have surfaced during the 2022 filing season. Optima Tax Relief reviews the scam and how to avoid it.
These scams involve the fraudulent use of Form W-2. Form W-2 is a tax form that reports an employee’s wages and other compensation for the year. It is an important document that is used to determine the amount of taxes that an individual owes. However, criminals are using this form to steal sensitive information and file fraudulent tax returns.
One of the most common scams involves the use of fraudulent W-2s. Criminals obtain this information by hacking into the computer systems of companies that have access to these forms. They then use the stolen information to file a tax return in the victim’s name and claim a refund.
Another scam involves the use of fake Form W-2 information. Criminals create fake forms with inflated wage amounts in an attempt to increase the amount of the refund they can claim. They may also include false information about the individual’s employer or job title to make the form look legitimate.
The most recent scam to emerge on social media is one that encourages people to use tax software to manually fill out a W-2 and input false information. The criminals then encourage these people to exaggerate the income on the W-2 and withholding and create a fake employer. Finally, they are instructed to file the return to receive a large refund. The refund could be as much as five figures because of the exaggerated withholding.
The IRS is urging taxpayers to be vigilant and to take steps to protect themselves from these scams. One of the most important things that taxpayers can do is to protect their personal information. This includes not sharing sensitive information online, such as Social Security numbers or bank account numbers, and not clicking on suspicious links or attachments in emails.
Additionally, taxpayers should be on the lookout for any unusual activity on their tax returns. This includes receiving a tax refund that they did not expect or receiving a notice from the IRS about a tax return that they did not file. If taxpayers suspect that their personal information has been stolen, they should contact the IRS immediately.
Those who are caught filing fraudulent tax returns can face serious penalties, including fines and even imprisonment. The penalty for filing a frivolous return is currently $5,000. The IRS is working to identify and prosecute those who are involved in these scams, but it is important for taxpayers to take steps to protect themselves and to report any suspicious activity to the authorities. The IRS is urging anyone who participates in any of these scams to amend their tax return as soon as possible.