There are countless experts handing out financial advice on the internet but, as anyone with even one bad experience knows all too well, the level of their expertise can vary greatly.
One survey found that one in four people come across financial advice online at least once a day while nearly 50% of millennials and Generation Z users prefer money content found on Reddit and Youtube to traditional advisers.
DON'T MISS: 'Tax Hack' Making The Rounds On Social Media Can Earn You a Huge Fine
With the tax-filing deadline now about two weeks away, the Internal Revenue Service (IRS) is warning against getting one's tax advice from social media and the broader internet.
I Am Once Again Asking You To Watch Out For Tax Scams, Warns IRS
As part of its annual "Dirty Dozen" tax scam line-up, the government agency named several widely-circulating online "tax hacks" that range from the misguided to the flat-out illegal — these include telling people to fill out the "secret" Form 8944 for economic hardship (in reality, this form can only be used by accountants and other tax professionals) and filling out a W-2 form with an inflated balance to get a larger tax refund.
"Unfortunately, sometimes people provide bad advice that can lure good taxpayers into trouble," the agency said in a statement. "The IRS warns taxpayers to be wary of trusting internet advice, whether it's a fraudulent tactic promoted by scammers or it's patently false tax-related scheme trending across popular social media platforms."
Another type of scammer identified by the IRS invents fake charities and very vocally advertises "tax deductions" for those who give to them. (This is actually a double scam since any money goes to the scammer while a fraudulent charity is not eligible for write-offs.)
In its efforts to reach people right as they doing last-minute changes to their taxes, the IRS has seriously amped up its messaging around tax season scams — on March 22, it issued a similar warning about steering clear of un-credentialed people offering help "filling out tax forms" on social media.
This Is How You Find Your Trusted Tax Professional
The problem, the agency warns, is that one will not be able to fall back on these "advisers" during an audit. Each person is ultimately the one responsible for the information submitted on their tax return and and, if certain income and deduction information fails to line up, risks an audit.
As the rush to file taxes on time increases, many scammers tap into people's desperation to find prey. Each year sees a number of slightly-altered schemes that tap into current news and distracted filers may not always recognize — amid discussions on the price of gas, another inaccurate "tax hack" involving fuel tax credit claims has been making the rounds on social media.
"The IRS continues to see a lot of inaccurate information that could get well-meaning taxpayers in trouble," IRS Commissioner Danny Werfel said in a statement. "People should remember that there is no secret way to fill out a form and simply get a larger refund that they aren't entitled to."
As the nuances of the tax system remain a tangled web for the average person, a tax professional is crucial for anyone with an income history that is even slightly more complicated than a single employer.
According to the IRS, the way to weed out scammers and find a true professionals has to do with three things: reading up on and knowing the credentials required to call oneself an accountant, checking for Preparer Tax Identification Number (PTIN) and avoiding those who aggressively market huge refunds or "invent false income to try to get their clients more tax credits."
