Another scam involves inflating or including income on a tax return that was never earned, either as wages or as self-employment income in order to maximize refundable credits. Claiming income you did not earn or expenses you did not pay in order to secure larger refundable credits such as Earned Income Tax Credit could have serious repercussions. This could result in repaying the erroneous refunds including interest and penalties, and in some cases, even prosecution.
Courtesy of the IRS Issue Number: 2014-16
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