IRS Alert: Tax Payers Need to be on the Look out for Fraud
Tax-Definition.org (http://www.tax-definition.org) is reporting on the second part of the tax scam alert from the Internal Revenue Service (IRS): Manipulation of Tax Codes and Laws in Tax Scams.
With the IRS bringing out its annual listings for the numerous tax scams that are taking place, the debate on the misuse of tax laws has become hotter. The “Dirty Dozen” looks at different kinds of tax scams that have taken place in a year, to keep the people of United States aware of the fraud agencies and their owners who move around in the guise of tax professionals.
The modus operandi of the so-called tax agencies and tax counselors is to manipulate the established rules and laws in order to get tax reduction. They catch hold of people who are most prone to falling for their false claims. Following the tax-deduction techniques given by them can land you in prison. The IRS keeps a strict tab on the numerous agencies and takes legal action against the fraudulent ones.
The different clauses and doctrines that are twisted and used for getting tax reduction are:
Evasion of employment tax: There are times when the tax agencies instruct the tax filers not to withhold the employment taxes from their wages. This is a wrong interpretation of the Section 861. Following anything like this can lead to criminal convictions and injunctions. Penalties and extra taxes can be charged from the people found guilty by the IRS.
Corporation sole: There are many people, who apply for incorporation by claiming to be a part of some religious organization, or other phony institution in the hope that they may be exempted from federal income tax. The corporation sole statute gives the benefit of tax exemption to the to religious leaders, thereby separating them from the ownership of church and other assets, legally. The tax agencies ask people to use this statute to escape taxes, other debts, and child support.
Increasing offshore transactions: Most of the people are advised to hide their income in offshore banks and accounts by the tax agencies. Such people tend to use offshore credit cards, life insurance, leasing schemes, wire transfers, and foreign trusts to evade paying huge taxes. The IRS and other U.S. agencies are on a look out for such people who approve of and promote such illegal transactions.
Cases of Identity thefts: The IRS has received information about some identity thefts where impostors have stolen valuable information from people guising themselves as officers from the IRS. The stolen data has then been used for credit card and loan application. Some people have also received fictitious correspondence from different agencies posing as the IRS. People tend to disclose very important information to them like their social security and checking account numbers, and many other things.
Deductions for charitable institutions: Different charitable institutions and non-profit organizations have the benefit of tax deductions. The tax agencies advise their customers to transfer all their assets and other properties to any such institution, on paper. The person still maintains actual control or hold of that property. This helps the individual to get tax exemption and other deductions. IRS discourages such practices and takes legal action against the guilty.
The best thing to do is to avoid getting duped by fraud tax agencies, and contacting the IRS directly for any sort of information, or clarification.
Learn more about electronic filing (e-filing) : http://www.tax-definition.org/Define-Electronic-filing.html
Tax Forms for E-filers: http://www.tax-definition.org/tax-forms
Howard Schwartz is a partner in several business strategy groups, including HJ Ventures International, Inc. Howard has worked with hundreds of entrepreneurs worldwide with a focus on writing Business Plans for companies interested in raising capital from Venture Funds and Angel Investors. Howard’s business plans have secured several million dollars in funding.For more information: http://www.hjventures.com/executive-coaching/Business-Coach.htm
Learn more about the advantages of executive coaching:
Recent articles in this category:
- Guide To Finding The Right Irs Debt Help Solution For Your Situation
Finding the right IRS debt help for your situation is crucial. Where you turn for assistance will de
- The Basic Function Of Accounting
Accounting is a profession as old as the hills. It was a well known practice in the Roman, Ancient E
- The Fundamental Concepts Of Accounting
The Federal Election was held in Australia on 21st of August 2010. During the rather boring election
- Higher Earners Warned Over Tax Relief
Those that fall into the higher earners bracket have been warned that the government may impose furt
- Procter & Gamble Wins R&d Credit Case Against The Irs
On June 25, 2010, the U.S. District Court in Procter & Gamble Co. and Subsidiaries (P&G) v. United S
- 3 Ways To Settle Irs Tax Debt For Less
You can settle IRS tax debt for less if you know your options. There are several ways that you can s
- Five Steps To Finding The Best Tax Lead Company For Your Business
The lead buying business has become an efficient and proven form of outsourcing marketing efforts to
- Truly Effective International Tax Advice
A big concern for the public and corporate business units is to deal with the international tax at t
- How To Avoid Making The Common Tax And Bookkeeping Mistakes?
Even though who consider themselves in the financial loop may fall prey to some of the most common t
- How To Appeal Your Property Tax Bill
The responsible homeowner will want to do a thorough check of their property tax bill to ensure they
Most viewed articles in this category:
- New Tax Rules for the Poor
New tax rules for 2007 will bring about a good year for the poorest of tax-filers in Maryland. Tax-f
- The Best LEGAL Tax Shelter in the World-- Your Home-Based Business!
Welcome to the best legal tax shelter in the world-- you home-based business! As long as you keep go
- Income Tax Questions Answered Because of Radio - The World Is a Client of "Better Business"
Having hosted a financial radio program over several years has exposed me to many questions. Some of
- IRS Is Focusing on Schedule C Filers
In the last few tax years IRS has been paying more attention to taxpayers who file a schedule C. The
- 2007 Brings Tax Relief for N.Y. Residents
As of January 1, 2007, New York residents have been benefiting from a decrease in hospital bills, an
- Lost Last Year's Tax Return?
It happens every year. Just when you get motivated to get rolling on your taxes, you realize you can
- Figuring Out Your Tax Return Filing Status
When you are ready to plop down and start preparing that tax return, one of the first questions is y
- Taxes: How To Dramatically Reduce Your Taxes With One Simple Step
How to Make It, Keep It, Protect It. Did you know the federal government may keep up to 65.9% of eve
- Energy Efficient Home Tax Credits
Under the Energy Policy Act of 2005 you can get a tax credit if you installed energy efficient win
- Estate Taxes
Federal estate tax applies to the transfer of property at death. The estate of a person who died is