Cheating on your taxes usually means understating your income. But sometimes an unscrupulous tax preparer will try to inflate clients' income, the IRS said.
Here's why: Some people make too little to owe federal income taxes, but may still qualify for a refund by claiming certain refundable credits, like the Earned Income Tax Credit (EITC).
To make sure their clients get the maximum - and they get a bigger fee - shady preparers will report that clients earned more than they did.
For instance, a couple with two kids who earned between $13,650 and $23,300 in 2014 could get $5,460 from the EITC, said Mark Luscombe, principal analyst for Wolters Kluwer Tax & Accounting US.
But if they earned less than $13,650, they wouldn't get that max refund.
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But by falsely inflating their income to, say, $14,000, they could get the $5,460.
The Child Tax Credit may also be abused in this way. The refundable portion of CTC is tied to earned income and is meant to help offset the cost of children for low-income families.
If caught, however, tax filers will have to repay the erroneous refund, plus interest and penalties.