Each year, the IRS releases its “Dirty Dozen” list—a warning to taxpayers about the most common scams, schemes, and pitfalls that can lead to mistakes, penalties, or even audits. One of the key items on the list in recent years is “bad tax advice circulating on social media.”
In today’s world, TikTok, Instagram, YouTube, and Reddit have become go-to sources for everything from cooking tips to investment strategies. But when it comes to taxes, following “hacks” from unverified sources can cost you much more than you save.
Why Social Media Tax Advice Is Dangerous
Social media posts are often:
- Oversimplified. Tax law is highly technical. A quick video or post rarely captures all the details and exceptions.
- Misinformed. Many influencers are not tax professionals. What worked for one person—or what they think worked—may not be correct or legal.
- One-size-fits-all. Every taxpayer’s situation is different. Advice that’s “great” for someone self-employed may be completely wrong for someone who earns only W-2 wages.
Every day, “Tax Hacks” circulate online, which can Get You in trouble. Some of the most common social media myths flagged by the IRS include:
The IRS has flagged several viral “strategies” that simply don’t hold up under tax law. Here are some of the most popular—and most dangerous—ones you might see on TikTok, YouTube, or Instagram:
- Claiming pets as dependents
- You might see videos suggesting that you can list your dog or cat as a dependent and deduct vet bills as medical expenses. This is flat-out false. Dependents must be qualifying children or relatives who meet strict IRS rules. Pets never qualify.
- Turning personal expenses into “business write-offs”
- Influencers often claim you can write off vacations, luxury cars, or even your daily meals just by calling yourself a business owner. While legitimate businesses can deduct ordinary and necessary expenses, trying to deduct your family trip to Disney as a “business meeting” is an audit trigger.
- “The $400 Rule” myth
- A popular myth says that if you make less than $400, you don’t need to report the income. That’s misleading. The $400 threshold only applies to the self-employment tax. You must still report all income, regardless of its amount.
- The “Credit Factory” trick
- Some posts claim you can inflate your refund by stacking credits you don’t qualify for, such as the Earned Income Tax Credit (EITC), Child Tax Credit, or education credits. Submitting false claims is fraud and can result in penalties of up to 75% of the underpaid tax, or even criminal charges.
- Abuse of EINs or fake businesses
- Another hack floating around is to create a shell LLC, get an Employer Identification Number (EIN), and start writing off all your living expenses. The IRS warns explicitly against this: filing a business return without an actual business is considered abusive.
- Filing as “Head of Household” to get a bigger refund
- Some videos encourage people to choose “Head of Household” even if they don’t qualify. This filing status has very specific requirements—like paying more than half the cost of maintaining a home for a qualifying dependent. Claiming it incorrectly is a red flag for the IRS.
- Misusing the “Augusta Rule”
- This real provision (Section 280A) allows homeowners to rent out their residence for up to 14 days tax-free. Some influencers exaggerate this, encouraging taxpayers to create sham leases between their business and their personal home. The IRS has made clear that abusing this rule can result in disallowed deductions.
- “Secret accounts” and sovereign citizen theories
- A fringe corner of social media pushes the idea that you can tap into a “secret Treasury account” or avoid paying taxes entirely by declaring yourself exempt as a “sovereign citizen.” The IRS considers these frivolous arguments, and penalties of $5,000 per frivolous return in addition to back taxes and interest.
These hacks may sound clever in a short video, but following them could result in penalties, interest, audits, or even criminal charges.
The IRS Dirty Dozen and You
The IRS highlights these scams in the Dirty Dozen because they see the real-world consequences: taxpayers are audited, refunds are denied, penalties are assessed, and criminal charges are filed.
How to Protect Yourself
- Get advice from qualified professionals. Rely on CPAs, enrolled agents, or tax attorneys who understand the law.
- Check official sources. The IRS website (www.irs.gov) is the most reliable place for up-to-date information.
· Be skeptical of “too good to be true” tips. If someone promises you a giant refund from a simple trick, that’s a red flag.
· Remember that your tax return is your responsibility. Even if you follow someone else’s advice, the IRS holds you accountable for what you file.
Bottom Line
Taxes are complicated, but they’re not something to gamble on with advice from strangers on social media. If you see a tax “hack” online, take it with a grain of salt—and verify it with a trusted tax professional.
Filing an accurate return is always better than chasing a refund based on bad advice. As the IRS reminds us in its Dirty Dozen, don’t let social media steer your tax decisions.
