Avoid the Earned Income Tax Credit (EITC) Trap: Protect Your Disability Benefits from Fraudulent Tax Preparers
Warning: The Earned Income Tax Credit Trap
Don’t Let a Dishonest Tax Preparer Ruin Your Disability Claim
Unfortunately, some tax preparers cheat on behalf of their clients. While they may claim to be "helping" you get more money, cheating is never acceptable—and the legal consequences can be devastating. A prime example of this is the Earned Income Tax Credit (EITC) scam, which has already destroyed the legal cases of many of our clients.
The EITC: Cash, Not a Deduction
The EITC was designed by Congress to provide extra cash to low-income workers. Unlike a deduction, which simply lowers your taxable income, a credit is direct cash from the government. For the 2025 tax year, these amounts are substantial:
- $649 (No children)
- $4,328 (One child)
- $7,152 (Two or more children)
To receive this money, you must have "earned income." If you didn’t work and don't have a W-2, you do not qualify.
The Scam: Fabricated Self-Employment
Crooked preparers often try to bypass the rules by listing clients as "self-employed." They manufacture fake income on a Schedule C to hit the "sweet spot" for the maximum credit. In 2025, the income limits to qualify are:
- $26,214 (No children)
- $57,554 (One child)
- $64,430 (Two children)
By creating this "fake" income, the preparer is forced to file a Schedule SE, which triggers Social Security tax payments.
The Trap: Losing Your Disability Benefits
This is where the scam becomes a trap. To win your Social Security Disability case, Gordon & Pont must prove to the government that you are unable to work.
When your tax preparer files a return claiming you are self-employed, they are officially telling the government that you can work. That tax record goes straight to the Social Security Administration. We have seen many winning cases instantly dismissed by Administrative Law Judges who simply point to these fraudulent tax returns as proof that the claimant is not disabled.
Protect Your Future
EITC fraud is not just illegal—it’s a self-destructive trap. For a small short-term payout, you risk:
- Criminal Charges: Jail time for you and your preparer.
- Loss of Benefits: Forfeiting all retroactive disability payments for you and your children.
File honest, truthful returns. Don’t let a dishonest tax preparer trade your long-term security for a fraudulent refund.
