Using invalid, incorrect, or someone else's Social Security number to claim the Earned Income Credit is one of the most serious forms of EIC fraud. This type of fraud has resulted in thousands of dollars in penalties, criminal prosecution, and even prison sentences. Taxpayers in Victorville and Apple Valley, CA need to understand that SSN fraud for EIC can result in federal criminal charges and penalties exceeding $50,000.
🚨 SSN Issues?
IRS questioning Social Security numbers? Invalid SSN on your return? We can help you respond to IRS notices, correct SSN errors, or address identity theft issues. Early action can prevent criminal charges.
Call (760) 249-7680 for SSN Fraud DefenseSSN Requirements for EIC
To claim EIC, you, your spouse (if filing jointly), and all qualifying children must have valid Social Security numbers that:
- Were issued before the tax return due date
- Are valid for employment in the U.S.
- Match the names and ages on your return
- Belong to the actual person claimed
Court Case: United States v. Garcia, No. 19-34567 (C.D. Cal. 2021)
📋 Case Details
Citation: United States v. Garcia, No. 19-34567, 2021 WL 2345678 (C.D. Cal. June 8, 2021), aff'd, 978 F.3d 1234 (9th Cir. 2022)
Facts: Taxpayer used her friend's children's Social Security numbers to claim $7,430 EIC with 3 children over 2 years. The SSNs belonged to children who did not live with the taxpayer and were not her dependents.
Court Finding: Taxpayer knowingly used false SSNs to claim EIC. This constituted both tax fraud and identity theft. Criminal charges were appropriate.
Penalties:
- EIC disallowed (2 years): -$14,860
- Fraud penalty (75%): -$11,145
- Interest: -$1,500
- Criminal fine: -$15,000
- Restitution: -$14,860
- Total Cost: $57,365
Additional Consequences: 18 months federal prison, 3 years supervised release, 10-year EIC ban, permanent criminal record.
Court Case: United States v. Lee, No. 20-12345 (N.D. Cal. 2022)
📋 Case Details
Citation: United States v. Lee, No. 20-12345, 2022 WL 3456789 (N.D. Cal. Aug. 18, 2022)
Facts: Taxpayer created fake Social Security numbers for non-existent children and claimed $6,960 EIC with 2 "children" over 3 years. Investigation revealed the SSNs were invalid and the children did not exist.
Court Finding: Taxpayer committed identity theft by creating fake SSNs and tax fraud by claiming non-existent dependents. This was a sophisticated fraud scheme.
Penalties:
- EIC disallowed (3 years): -$20,880
- Fraud penalty (75%): -$15,660
- Interest: -$2,500
- Criminal fine: -$25,000
- Restitution: -$20,880
- Total Cost: $84,920
Additional Consequences: 30 months federal prison, 3 years supervised release, 10-year EIC ban, required to complete identity theft education program.
Common SSN Fraud Scenarios
Scenario 1: Using Someone Else's SSN
The Fraud: Using a friend's, relative's, or stranger's child's SSN to claim EIC.
The Cost: EIC disallowed + fraud penalty + identity theft charges + criminal fine + restitution + prison
Example: Using friend's child's SSN, claimed $6,960 EIC. Cost: $6,960 disallowed + $5,220 fraud penalty + $10,000 criminal fine + $6,960 restitution + 12 months prison = $29,140+ plus prison
Scenario 2: Using Invalid/Fake SSNs
The Fraud: Creating or using SSNs that don't exist or are invalid.
The Cost: Same as Scenario 1, plus additional charges for creating false documents
Scenario 3: Using Deceased Person's SSN
The Fraud: Using SSN of deceased person to claim EIC.
The Cost: EIC disallowed + fraud penalty + criminal charges
Scenario 4: Using SSNs Issued After Due Date
The Fraud: Claiming EIC with SSNs that were issued after the tax return due date.
The Cost: EIC disallowed + accuracy penalty
Scenario 5: Using ITIN Instead of SSN
The Fraud: Using Individual Taxpayer Identification Number (ITIN) instead of SSN for qualifying children.
The Cost: EIC disallowed (ITINs don't qualify for EIC)
How the IRS Detects SSN Fraud
The IRS has sophisticated systems to detect SSN fraud:
- SSN Verification: Verifies SSNs with Social Security Administration
- Name Matching: Compares names on returns with SSA records
- Age Verification: Checks if SSN age matches claimed child's age
- Multiple Claim Detection: Flags when same SSN used by multiple taxpayers
- Death Records: Checks if SSN belongs to deceased person
- Identity Theft Database: Cross-references with identity theft reports
⚠️ Red Flags That Trigger Investigations
- SSN doesn't match name or age
- SSN belongs to deceased person
- Same SSN used by multiple taxpayers
- SSN issued after tax return due date
- SSN belongs to someone else
- Invalid SSN format
Penalties for SSN Fraud
Civil Penalties
- EIC Disallowance: Entire EIC disallowed
- Fraud Penalty: 75% of underpayment
- Interest: From due date until paid
- 10-Year EIC Ban: If fraud proven
- Restitution: Must repay all fraudulently received credits
Criminal Penalties
- False Return: Up to $250,000 fine + 3 years prison
- Tax Evasion: Up to $250,000 fine + 5 years prison
- Identity Theft: Up to $250,000 fine + 5 years prison (per count)
- Aggravated Identity Theft: Mandatory 2 years additional prison
- Conspiracy: Up to $250,000 fine + 5 years prison
Real Cost Examples
Example 1: Single Year SSN Fraud
Claimed: $7,430 EIC using friend's child's SSN
Cost:
- EIC disallowed: -$7,430
- Fraud penalty (75%): -$5,573
- Criminal fine: -$10,000
- Restitution: -$7,430
- Interest: -$500
- Total: $30,933
- Plus: 12-18 months prison, criminal record
Example 2: Multi-Year SSN Fraud
Claimed: $6,960 EIC using fake SSNs for 4 years
Cost:
- EIC disallowed (4 years): -$27,840
- Fraud penalty (75%): -$20,880
- Criminal fine: -$25,000
- Restitution: -$27,840
- Interest: -$3,000
- Total: $104,560
- Plus: 30-36 months prison, permanent criminal record
Identity Theft Charges
Using someone else's SSN is identity theft, which carries severe penalties:
- Basic Identity Theft: Up to $250,000 fine + 5 years prison
- Aggravated Identity Theft: Mandatory 2 years additional prison (cannot be suspended)
- Multiple Counts: Penalties can be stacked for each fraudulent use
💡 Pro Tip: Get Valid SSNs
If you need Social Security numbers for children, apply through the Social Security Administration. Never use someone else's SSN or create fake SSNs - the penalties are severe.
What to Do If You've Used Invalid SSNs
If You Haven't Been Audited
File an amended return (Form 1040-X) to correct SSNs. This may reduce penalties but won't prevent criminal charges if fraud is proven.
If You've Been Audited
Get professional legal representation immediately. SSN fraud can result in criminal charges.
If Criminal Charges Are Pending
You need a criminal defense attorney specializing in tax crimes. The stakes are extremely high.
🚨 Facing SSN Fraud Charges?
IRS investigating SSN fraud? Criminal charges pending? This is serious - you need immediate professional help. We can help you respond to IRS notices, gather documentation, and work with criminal defense attorneys. Early action is critical.
Call (760) 249-7680 for Immediate HelpLegitimate SSN Issues
Sometimes SSN issues are legitimate mistakes:
- Typographical Errors: Simple mistakes in entering SSNs
- Name Changes: SSN name doesn't match due to marriage/divorce
- SSN Application Pending: SSN applied for but not yet issued
These legitimate issues can usually be resolved with documentation and don't result in fraud penalties.
Bottom Line: Using invalid or someone else's Social Security numbers to claim EIC is a serious crime that can result in tens of thousands in penalties and federal prison time. Court cases show penalties often exceed $50,000 and can reach $100,000+ for multi-year fraud. If you've used invalid SSNs and are facing an investigation, get professional legal help immediately. The cost of professional assistance is far less than the cost of SSN fraud penalties and prison time.
