Falsifying your W2 form isn't going to yield a bigger tax return

Photo (c) Syahrir Maulana - Getty Images

The IRS is making it clear that fraudulent tax forms are subject to penalties, fines, and even investigations

Earlier this tax season, the Internal Revenue Service (IRS) warned taxpayers to expect an increase in scam calls related to their taxes. The calls were likely to come from people pretending to be the IRS, and they’d call unsuspecting taxpayers asking for personal information or money. 

While these scams certainly still pose a threat to taxpayers, the agency is now issuing warnings about a new scam that has grown in popualrity throughout tax season. 

The IRS explained that scammers are encouraging taxpayers to falsify their W2 forms to make up everything from their employer, to their withholdings, to their income, all in the hopes of getting a bigger refund. Others are encouraged to claim credits that don’t actually apply to their filing situations – also in the hopes of getting more money. 

“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 Doug O’Donnell, acting IRS commissioner. “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.” 

What does the scam look like? 

Taxpayers can expect to see this scam making its way around social media. Scammers are pushing the idea that taxpayers will get back bigger tax refunds if they file their taxes electronically and fudge the numbers. 

Altering the W2 form to look like the taxpayer has a high income and is withholding higher amounts is supposedly going to yield five-figure tax refunds. Taxpayers are told to fill out their taxes manually, and also file their returns electronically to receive these bigger refunds. 

The IRS also outlined two other variations of this scam. In one scenario, taxpayers falsely fill out a Schedule H (Form 1040).

The form, and subsequent refund, are supposed to be for taxpayers who hired employees to do work in their homes and had federal taxes withheld from their pay. However, scammers are filing it under false pretenses, making up employees who never did work for them. 

Another situation is falsely claiming Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals. The IRS explained that not only is this form no longer available to taxpayers for the 2022 tax year, but it was designed to give a tax break to self-employed taxpayers during the pandemic. 

There are consequences

Moving forward, the IRS wants taxpayers to know that they should expect repercussions it they falsify their tax documents. 

In an effort to ensure that all information submitted to the IRS is accurate, the agency is working closely with the Security Summit and the Social Security Administration to verify all information on W2s. 

However, for those who follow through with one of these scams, there are consequences. Punishment can range from fines and penalties from the IRS, all the way to criminal prosecution for knowingly filing a false tax return. 

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