Using the wrong filing status to claim the Earned Income Credit is a common form of tax fraud that has cost taxpayers thousands of dollars. Filing as "Head of Household" when you're actually "Single" or "Married Filing Separately" can significantly increase your EIC, but it also significantly increases your penalties when caught. Taxpayers in Victorville and Apple Valley, CA need to understand that false filing status for EIC can result in penalties exceeding $10,000.VictorvilleApple Valley, CA

Head of Household Requirements for EIC

To file as Head of Household and claim EIC, you must meet ALL of these requirements:

• Unmarried: You must be unmarried or considered unmarried on the last day of the yearUnmarried:
• Qualifying Person: You must have a qualifying child or qualifying relative who lived with youQualifying Person:
• Paid More Than Half: You must have paid more than half the cost of keeping up a homePaid More Than Half:
• Not Married Filing Jointly: You cannot file a joint returnNot Married Filing Jointly:

Court Case: Martinez v. Commissioner, T.C. Memo. 2020-78

Court Case: United States v. Williams, No. 19-45678 (E.D. Cal. 2019)

Common False Filing Status Scenarios

Scenario 1: Married But Filing as Head of Household

The Fraud: Filing as Head of Household when actually married and living with spouse.The Fraud:

Why People Do It: Head of Household has higher EIC limits and lower tax rates than Married Filing Separately.Why People Do It:

The Cost:The Cost:

• EIC disallowed (entire credit)
• Fraud penalty (75% of underpayment)
• Tax on income recalculated at correct filing status
• Interest on all underpayments

Example: Married filing as HOH, claimed $6,960 EIC. Correct status (MFS) disqualifies EIC. Cost: $6,960 disallowed + $5,220 fraud penalty + $1,500 additional tax + interest = $14,000+Example:

Scenario 2: "Separated" But Not Legally Separated

The Fraud: Claiming to be "separated" to file as Head of Household when still legally married and living together.The Fraud:

The Cost: Same as Scenario 1, plus potential criminal charges for false statements.The Cost:

Scenario 3: No Qualifying Person

The Fraud: Filing as Head of Household without a qualifying child or qualifying relative.The Fraud:

The Cost: EIC disallowed + filing status penalty + tax recalculationThe Cost:

Scenario 4: Didn't Pay More Than Half

The Fraud: Filing as Head of Household when someone else (parent, grandparent) paid more than half the household costs.The Fraud:

The Cost: EIC disallowed + penaltiesThe Cost:

When You're "Considered Unmarried"

You can file as Head of Household even if married IF you meet ALL of these:

• File separate return
• Paid more than half the cost of keeping up home
• Spouse did not live in home during last 6 months of year
• Home was main home of qualifying child for more than half the year
• You can claim child as dependent

How the IRS Detects False Filing Status

The IRS uses multiple methods to detect false filing status:

• Database Matching: Compares addresses on returnsDatabase Matching:
• Spouse Return Comparison: Checks if spouse also filedSpouse Return Comparison:
• Address Verification: Verifies who actually lives at the addressAddress Verification:
• Household Cost Analysis: Reviews who paid household expensesHousehold Cost Analysis:
• Marriage Records: Checks marriage and divorce recordsMarriage Records:

Penalties for False Filing Status

Civil Penalties

• EIC Disallowance: Entire EIC credit disallowedEIC Disallowance:
• Tax Recalculation: Tax recalculated at correct filing statusTax Recalculation:
• Accuracy Penalty: 20% of underpaymentAccuracy Penalty:
• Fraud Penalty: 75% of underpayment (if fraud proven)Fraud Penalty:
• Interest: From due date until paidInterest:
• 10-Year EIC Ban: If fraud proven10-Year EIC Ban:

Criminal Penalties

• False Return: Up to $250,000 fine + 3 years prisonFalse Return:
• Tax Evasion: Up to $250,000 fine + 5 years prisonTax Evasion:

Real Cost Examples

How to Determine Correct Filing Status

Step 1: Determine Marital Status

Were you married on December 31? If yes, you're generally married for the entire year.

Step 2: Check Head of Household Requirements

If unmarried, do you meet ALL Head of Household requirements?

Step 3: Consider "Considered Unmarried" Exception

If married, do you meet ALL "considered unmarried" requirements?

Step 4: Get Professional Help

If unsure, consult with a tax professional. Filing status errors are expensive.

What to Do If You've Filed Incorrectly

If You Haven't Been Audited

File an amended return (Form 1040-X) to correct filing status. This may reduce penalties.

If You've Been Audited

Gather documentation proving your filing status and work with a tax professional.

If Penalties Have Been Assessed

You may be able to appeal or negotiate penalties. Professional representation is essential.

Bottom Line: Using false filing status to claim EIC can cost thousands of dollars. Court cases show penalties often exceed $10,000 and can reach $50,000+ for multi-year fraud. If you've filed as Head of Household and are facing an audit, get professional help immediately. The cost of professional assistance is far less than the cost of false filing status penalties.Bottom Line: