Hi everyone, I’m Berre Hochberger, CPA, CGMA. With tax season here, it’s important to stay vigilant against scams targeting taxpayers. One of the most concerning schemes reported by the IRS involves false W-2s, which can lead to serious repercussions for those who unknowingly participate. In today’s quickie, we’ll discuss two common types of false W-2 scams and how to protect yourself.
Altered W-2 Data
One alarming trend is the alteration of legitimate W-2 forms. Scammers have been known to change data on W-2s to inflate income or claim false deductions. This can happen in a few ways: fraudulent individuals might use real W-2 forms from unsuspecting taxpayers, modify the income figures, and file fake tax returns to claim refunds.
If you receive a W-2 that looks suspicious or contains information you don’t recognize, do not ignore it! Always compare it with your own records. If you suspect that your W-2 has been tampered with, report it to the IRS immediately. Additionally, always safeguard your personal information, such as your Social Security number, to prevent it from falling into the wrong hands.
Schedule H for Household Employers
Another scam that was making headlines a couple years back involves Schedule H, which is used by household employers. If you employ a nanny or other household worker and pay them a salary, you are required to provide them with a W-2 form. However, some scammers create fake W-2s claiming they had household employees who never existed. This trick is often used to claim fraudulent credits, such as sick leave or childcare credits.
If you are a household employer, ensure you are compliant with IRS regulations. Provide accurate W-2 forms to your employees and report their wages correctly. If you don’t have a household employee but see a fraudulent form claiming otherwise, make sure to report it. The IRS takes these scams seriously, and reporting them can help protect others from falling victim.
Protect Yourself!
Staying informed is your best defense against tax-related scams. Always review your tax documents carefully and be wary of anyone offering to help you file taxes in exchange for a fee, especially if they suggest claiming benefits or credits that don’t apply to you.
If you suspect you’ve been targeted by a scam or have questions about your tax situation, don’t hesitate to reach out for professional help. Navigating tax laws can be complex, but with the right information and support, you can ensure your tax filing is accurate and secure.
Stay safe this tax season, and remember: if something seems too good to be true, it probably is!
