Claiming the Earned Income Tax Credit Fraudulently Will Get You Audited

Updated on May 1, 2020
shuck72 profile image

Shuck72 has over 20 years of experience working in the child support industry and working with clients on tax issues.

Money isn't growing on trees.
Money isn't growing on trees. | Source

The earned income tax credit is designed for the working poor struggling to make ends meet. The IRS encourages everyone making less than $49,078 per year to see if they qualify to claim the EITC. In 2012, the EITC disbursed over $59 billion dollars to those who claimed the EITC. The amounts vary but the average filer received $2,200. The maximum EITC amount for 2019 is a whopping $6,557.

As you can see, there are substantial amounts of money flowing through the EITC program. Therefore, it is also fertile ground for tax fraud. It’s estimated that 1 out of 3 EITC claims are fraudulent. Fraudulent filing of the EITC is so rampant in fact that the IRS implemented a specific clause that prohibits a filer from claiming the EITC for two years if they are caught claiming it erroneously.

“A person or couple will be disallowed EIC for two years if they claim EIC when not eligible and the IRS determines the 'error is due to reckless or intentional disregard of the EIC rules.' A person or couple will be disallowed for ten years if they make a fraudulent claim. Form 8862 is required after this time period in order to be reinstated. However, this form is not required if EIC was reduced solely because of a math or clerical error.”

Who Qualifies for the Earned Income Tax Credit?

If your income is under a certain threshold, you may qualify for the earned income tax credit. Use the table below to see if you qualify.

EITC Eligibility Requirements 2019

Three or More Qualifying Children
Two Qualifying Children
One Qualifying Child
No Children
Income: less than $50,162
Income: less than $46,703
Income: less than $41,094
Income: less than $15,570
Income if Married and Filing Jointly: less than $55,952
Income if Married and Filing Jointly: less than $52,493
Income if Married and Filing Jointly: less than $46,884
Income if Married and Filing Jointly: less than $21,370
Maximum Refund: $6,557
Maximum Refund: $5,828
Maximum Refund: $3,526
Maximum Refund: $529


A single person getting paid minimum wage at Walmart would likely qualify for a $529 credit. If that same person had three children, they would likely qualify for a $6,557 credit.

Where Do People Make Mistakes?

They claim children they don’t have the right to claim. For instance, in the example above the filer may, in fact, have three kids, but they may live with their mother and not him. He may look at the EITC and think claiming the three kids is the difference between getting the $529 he is entitled to or $6,557 he is not entitled to if the kids are not his dependents. That’s a lot of money and can be quite tempting, especially to someone struggling to make ends meet on minimum wage. In fact, it's so tempting that some people who don’t even have children say they do to try and bump up their EITC.

Another common error is several filers claiming the same child. A father may claim his son for purposes of the EITC, and the aunt, for instance, claims the same child on her EITC as the child lived with her for part of the year.

Will I Get Caught If I Claim a Tax Credit?

It depends on your level of fraud. If you don’t have children but claim you do, then, yes, most certainly. In the age of computers, social security numbers are easy to track and verify. It’s not like the 70s where people got away with claiming their dogs as dependents and stood a good chance of getting away with it.

If you are claiming a child that's not your dependent and nobody else also claims the child on their tax return, you may escape detection. The IRS audits less than 1% of returns so if there are not any blatant red flags, such as more than one filer claiming the same child, the odds of going undetected go up.

Do you think anyone you know would tip off the IRS about your fraud? This is a very real way many people get caught committing tax fraud. Your significant other may know all about your dirty laundry and the fact that you fudged your EITC claim. If that significant other at some point then becomes angry and spiteful, they may call the IRS to inform them of your misdeed.

What If I Do Get Caught?

The short answer is you’re screwed.

You will have to pay back all of the refunds and credits you received. In addition, you will be assessed interest, penalties, late payment fees, and possibly under-reported fines. The total you will owe them will be staggering, and you will have to pay it. You can’t wipe it out in a bankruptcy.

The IRS knows many people get away with tax fraud. They simply have too many returns to process each year to scrutinize each of them. On the one hand, this is good if you are a would-be cheater. On the other hand, this is very bad if you get caught.

You see, the IRS not only wants to punish you for cheating on your taxes by fining you into oblivion, but they also want you to tell everyone you know about your horror story with the IRS—how they are fining you $10,000, garnishing half your paycheck, and don't care if you have enough money to pay your rent.

You will, in fact, be a walking, talking public service announcement regarding the pitfalls of cheating on your taxes.

That said, if you are entitled to the EITC, you should claim it. It has been found to be one of the most effective weapons in fighting poverty and encourages many to enter the workforce when they otherwise may not.

If you're not entitled to it, then claiming it is tax fraud pure and simple, and if you get caught, you will pay.

It's just not worth the risk.

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.


    0 of 8192 characters used
    Post Comment
    • profile image


      13 months ago

      I have not filed in quite awhile I do not owe irs I owe a student for loan I’d like to clear up so I can get caught up and back on a payment plan of sort also the most concerning to me is that when I have not filed I’m very sure another person illegally claimed earned income credit for my child without either one of our permission or request we were illegally filed credit for my child to try to pull something not honest I need help with this issue

    • profile image

      Raymond E. Lyon 

      2 years ago

      is there an age limit


    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

    Show Details
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)
    ClickscoThis is a data management platform studying reader behavior (Privacy Policy)