The Internal Revenue Service issued a consumer alert today warning taxpayers of new scams. In one scheme, circulating on social media, taxpayers are encouraged to use tax software to manually fill out Form W-2 and make up large income and withholding amounts along with the employer the income is coming from. The scammer then instructs the taxpayer to file a tax return electronically in hopes of getting a large refund due to the inflated withholding.

The IRS is also seeing variations of this scheme which also involve misusing Form W-2 wage information in hopes of generating a larger refund. In the first variation taxpayers use Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals, to claim a credit based on income earned as an employee and not as a self-employed individual. However, these credits are not available for 2022 tax returns.

In a second variation taxpayers are instructed to make up fictional employees employed in their household and use Schedule H, Household Employment Taxes. This form is used to report household employment taxes if a taxpayer hired someone to do household work and those wages were subject to Social Security, Medicare or FUTA taxes, or if the employer withheld federal income tax from those wages. The taxpayer then claims a refund based on false sick and family wages they never paid.