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With tax fraud hitting $21 billion, the IRS acknowledged that filing as self employed is a major problem now. The problem with the system is that it does not take much information at all to file as self employed. All it take is a birth date, social security number and some made up numbers to file a fraudulent tax return. Although the system give alerts of red flags, the IRS system is a pay first ask questions later system.
Fraudulent tax returns grew from $6 billion to $21 billion within the last two years. The IRS will begin a major crackdown in an effort to stop fraudulent tax returns. Self employment is not the only way to file false tax returns. Filing head of household for tax breaks is also big problem. This year the government have not exactly release ways that they will catch fraudulent tax filers but an major investigation is underway.
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