I came across a report from the IRS recently regarding a tax preparer in Tucson. A Federal Court judge sentenced Adan Ramirez to six months in jail and to pay over $100,000 to the government. Ramirez's conviction arose from his role in filing false tax returns. Among his schemes, apparently, was convincing people to
file for the earned income credit (EITC) and the Additional Child Tax Credit (ADTC).
The way this works in such disreputable tax preparers as Ramirez encourage people, mostly women, to invent income they did not earn. Generally, this is reported as self-employment. This allows these people to put in from the EITC and ATDC. Engaging in this scam may seem harmless and a good way to get some free money from Uncle Sam. But, the consequences, as Ramirez is finding out, can be severe.
Not Working And Not Disabled
It can also affect a claim for Social Security disability benefits. If you claim imaginary income for a given year, Social Security is going to find that you were not disabled. They will consider that you earned too much money to be disabled. So, even though a medical condition may have kept you out of the workforce for years, Social Security will not pay you anything.
Check Your Earnings Record
I have encountered this scam many times. It can derail an otherwise excellent claim for Social Security disability. Interestingly, a lot of people who fall into this
snare claim they know nothing about it. It could be that criminals such as Ramirez file returns without the supposed filer even being aware. If you have any reason to think this applies to you, you should check your earnings record. Make sure the reported amounts correspond to your actual income. If you spot any discrepancies, contact the IRS immediately.
Words to live by: Always do the right thing.