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False W-2 Claims – A New Scam This Tax Season

The IRS is warning taxpayers to be aware of a new tax scam this season involving Form W-2. According to the agency, scammers are trying to convince taxpayers to use their wage information on a tax return to falsely claim credits which could ultimately result in a huge refund.


It is commonly known that the word gets around fast on social media. This is particularly the case in our scenario as a new form of fraud has been circulating on multiple social media platforms. This scam tells taxpayers to use certain tax software to falsely fill out their Form W-2 with fake income information.

Furthermore, fraudsters recommend that people just falsely report massive income and withholding as well as report a false employer on their W-2. Once these steps are taken, the scammer then tells the taxpayer to e-file the fake return, which can sometimes land a person with a refund of up to five figures – or in prison.

On the Case

Security Summit Partners of the tax industry as well as the IRS are keeping a close eye on this situation. The IRS has also been in close contact with payroll companies and other large employers throughout the entire country. The agency’s contact with these companies as well as their close work with the Social Security Administration in this case shows a strong effort to confirm all W-2 information. On top of this, Security Summit partners are also producing a public awareness campaign.

IRS Statement

“We are seeing signs this scam is increasing, and 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,” said acting IRS commissioner Doug O’Donnell. “The IRS and Security Summit partners remind people there is no secret way to get free money or a big refund. People should not make up income and try to submit a fraudulent tax return in hopes of getting a huge refund.”

Two Styles of This Scam

According to the Internal Revenue Service, there are two variations of this scam. However, both of these schemes include the misuse of W-2 wage information to generate a bigger refund.

The first variation involves the use of Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals. When it comes to Form 7202, fraudsters will the claim credit based on false income that they didn’t earn. Furthermore, these individuals will also claim income earned as an employee instead of a self-employed individual. The reason self-employed people may feel enticed to claim this credit as someone who is employed is that this credit was available for people who are self-employed during the years 2020 and 2021, but not for 2022.

The second form is very similar, but this one involves scammers making up fictional employees that they claim are working for them in their households. The scammers will do this to try and claim a refund that is based on fictional sick leave and family wages that were never actually paid throughout the year.

Wrap Up

Since this scam has gained traction on social media, the IRS is reminding everyone of the penalties and fines that come with tax fraud. Criminal penalties can even be imposed on someone for filing a false tax return. Hiring a trustworthy accountant and advisor will ensure that you or a loved one never fall into one of these silly traps.

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