Misinformation is a persistent challenge on the internet, and it has now seeped into the tax season, with tips circulating online that may not be entirely accurate. USC Marshall School of Business Associate Professor of the Practice of Accounting Greg Kling joins Yahoo Finance Live to discuss how to combat tax misinformation online.
Kling advises that when verifying tax recommendations found online, "if it sounds too good to be true, it probably is." He identifies two broad categories that individuals should steer clear of: "the tax protester arguments," which argue against the legality of paying taxes in the US, and "the influencer advice," which promotes the idea that influencers can use deductions to reduce their income taxes to zero. Kling labels both theories as "flat-out wrong."
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Editor's note: This article was written by Angel Smith
Video Transcript
BRAD SMITH: Taxpayers beware of unreliable advice this filing season. We're nearly two weeks away from tax deadline day. And with April 15 fast approaching, many people will turn to platforms like TikTok for the last minute tips on taxes. But how do you determine what information is most reliable and applicable for you.
Like, when you see a viral TikTok post telling Americans to stop paying taxes by illegally exempting themselves from tax withholdings. That's just one instance. What do we even mean by all of this?
For more on how to validate reliable versus unreliable tax advice, I'm joined by Greg Kling, who is the USC Marshall School of Business associate professor of the Practice of Accounting. Greg, great to have you here with us. Let's kick this off, first and foremost, with the number one identifier perhaps that people can look for when they are on social media and seeing a lot of these tax tips flow around this time of year.
GREG KLING: Well, first of all, thank you for having me this morning. Always a pleasure. It might sound a little bit of a cliché, but I think the number one identifier is if it sounds too good to be true, it probably is. And by that I mean, I don't want to just put skepticism out there. There are a lot of good tax planning strategies. But unfortunately, a lot of the misinformation out there is just downright wrong.
BRAD SMITH: And so of the information that you've seen floating around, what are some of the common, perhaps, or most repeated tips that have been really permeating throughout social media and where some of the users should be aware?
GREG KLING: Well, I think we can broadly put them into two categories. So the first one is-- and by the way, this one is not new. It's what we call the tax protester arguments. And it really just centers around the belief that taxes are not allowed in the United States. And so I don't need to pay taxes, and again, we call those folks the tax protesters. That's just flat out wrong.
Without going into the weeds on this, income taxation is here in the United States, both on a federal level and for many of the states. So that's just flat out wrong. You need to pay your income taxes.
The other broad group is I'll call it the influencer advice, which is, you're an influencer, you go on vacation. You buy clothing and also travel, meals, hotels, and you put up on TikTok or some other platform. I'm an influencer. I can deduct all of my expenses and get my income down to zero. Again, that's just flat out wrong as well.
BRAD SMITH: Greg, context matters. You know this. I know this. And a lot of people filing, they know this as well because there's certainly so many different forms that they have to fill out, so many different pieces of paperwork that they have to pull together to ensure that the government gets the full context of what their last year has entailed here.
So I believe even as we're thinking about some of the top profiles, sure, we've talked about the ones to be aware of, but are there top profiles that you've seen out there that maybe you even follow from time to time?
GREG KLING: You know, I would say for me, specifically, I don't. And that's only because of the space I'm in. I mean, being a teacher, needing to stay up on the tax on my own, I also do updates for CPAs and other tax preparers. So candidly speaking, I don't. And I think it's also-- I'm just very weary of the misinformation out there. So yeah, I'm probably the guy in the group that if I want to find an answer, I will go look it up myself.
BRAD SMITH: All right, Greg. We got to leave things there for today, but certainly great context to add to this conversation of where we're getting some of those tips and where we're also pulling in the professionals, the advisors out there as well. Greg Kling, who is the USC Marshall School of Business associate professor. Thank you so much for taking the time, Greg.
GREG KLING: Thank you. Glad to be here.
