Lately, I have seen a lot of Social Security Disability claimants get in trouble because they have reported self employment income to the IRS in order to receive a refund under the Earned Income Tax Credit. Unfortunately, in many instances, the claimant never really had any self employment income and the only purpose for falsely reporting this income was to get a refund. Beware! Those who engage in this practice are committing tax fraud!
In addition, falsely reporting self employment income will kill your chances of winning your Social Security Disability case. A person who is self employed will, in all likelihood, be found not to be disabled. Moreover, a person who has made a fraudulent tax return, is not going to be believed at all by a judge. If a claimant lied in his tax return, why wouldn't he or she also lie in her SSD application?
Through out the entire Social Security Disability process, is always good to keep in mind the fact that Uncle Sam knows a lot more about you than you think. Please remember that, you can't get away with telling one thing to the IRS and then telling something else to the SSA.
I suspect that tax preparers are largely responsible for the large number of fraudulent tax returns seeking an earned income tax credit. The tax preparers that we frequently see aggressively advertising in the inner city, solicit low income people and lead them to believe that there will be no consequences to filing a false tax return. In many instances, they convince disabled individuals who have been waiting for a long time for their Social Security Disability hearing and are desperate for money. This is truly unfortunate. More needs to be done to educate the public, --particularly those who are disabled--, about the consequences of falsely reporting income in order to get a refund. It would also be ideal if the government took a more aggressive stand in investigating the corrupt practices of tax preparers who induce low income individuals to engage in this practice.