Every year, the IRS i ues a list of tax scams. The goal is to alert taxpayers to the lack of merit o
Every year, the IRS i ues a list of tax scams. The goal is to alert taxpayers to the lack of merit of certain strategies as well as letting everyone know the IRS will not accept them.
2006 Scams
The IRS has kicked out its a ual list of highly dubious tax scams for 2006. Promoters often make these strategies sound credible, but they simply arent. If a taxpayer attempts to use one of the scams, the IRS will audit and aggre ively attack the taxpayer as well as try to identify the promoter for prosecution.
The 2006 list of scams contai most of the traditional claims. There are, however, three new areas being targeted by the IRS. They and a few others are highlighted in the following list.
Two new schemes have worked their way onto the list in 2006. In recent months IRS perso el have noted the emergence of the two scamszero wages and Form 843 tax abatement in which filers use IRS forms to claim that their tax bills have been wrongly inflated.
Also high on the list in 2006 is phishing, a favorite ploy of identity thieves. Over the past few years, the IRS has o erved criminals working through the Internet, posing even as representatives of the IRS itself, with the goal of tricking u u ecting taxpayers into revealing private information that can be used to steal from their financial accounts.
1. Zero Wages A new addition to the list, the zero wages scam is designed to create a log jam in the system. A taxpayer is su osed to file a tax return with no wages claimed and notice of challenges to any W-2 or 1099 wage reports. In e ence, the idea is to not pay taxes while the IRS tries to figure out what is going on. Ultimately, the goal is to get the IRS to accept a zero income tax return, which of course requires no payment of taxes.
2. Form 843 Tax Abatement The tax abatement strategy is very creative. It is typically used for taxpayers who have failed to file taxes for a few years. In such a situation, the IRS will often a e taxes to the individual based on a variety of factors. The strategy is to abate this a e ment and pay not tax by challenging the a e ed amount as being calculated incorrectly. The IRS says it doe t fly, but it is a very creative strategy.
3. Identity Theft/Phishing. This i t so much a tax reduction scam as a nightmare wherein identity thieves try to obtain information from taxpayers by acting as IRS agents. Often they send out email as though they are from the IRS. The IRS never sends emails to taxpayers, so dont re ond to these emails. If youre not sure, call the IRS and ask them if there is a problem. You can reach the IRS at 800-829-1040.
4 Credit Repair Companies You see these companies everywhere. Some are legitimate while others are not. The ones that are not charge high fees and do almost nothing other than putting taxpayers on some kind of a payment plan. The IRS is currently revoking the tax-exempt status of many credit repair companies.
5. Offshore Strategies A traditional area of angst for the IRS, offshore strategies continue to be closely watched. The IRS is hyper se itive to such strategies and tries to shut them down. In 2005, 68 individuals were charged and convicted for promotion offshore tax scams and thousands of taxpayers were audited with nightmarish results. If you want to go offshore, make sure you get qualified advice from a tax profe ional and attorney. Dont buy something off a web site.
There is a fine line between tax evasion and tax avoidance. Tax avoidance is legal while tax evasion is criminal. If you wish to pursue advanced tax pla ing, make sure you do so with the advice of a tax profe ional that is going to defend the strategy to the IRS.
The article is refered from http://www.bbcok.com, http://www.worldloanpro.com, please go to read more.
2006 Scams
The IRS has kicked out its a ual list of highly dubious tax scams for 2006. Promoters often make these strategies sound credible, but they simply arent. If a taxpayer attempts to use one of the scams, the IRS will audit and aggre ively attack the taxpayer as well as try to identify the promoter for prosecution.
The 2006 list of scams contai most of the traditional claims. There are, however, three new areas being targeted by the IRS. They and a few others are highlighted in the following list.
Two new schemes have worked their way onto the list in 2006. In recent months IRS perso el have noted the emergence of the two scamszero wages and Form 843 tax abatement in which filers use IRS forms to claim that their tax bills have been wrongly inflated.
Also high on the list in 2006 is phishing, a favorite ploy of identity thieves. Over the past few years, the IRS has o erved criminals working through the Internet, posing even as representatives of the IRS itself, with the goal of tricking u u ecting taxpayers into revealing private information that can be used to steal from their financial accounts.
1. Zero Wages A new addition to the list, the zero wages scam is designed to create a log jam in the system. A taxpayer is su osed to file a tax return with no wages claimed and notice of challenges to any W-2 or 1099 wage reports. In e ence, the idea is to not pay taxes while the IRS tries to figure out what is going on. Ultimately, the goal is to get the IRS to accept a zero income tax return, which of course requires no payment of taxes.
2. Form 843 Tax Abatement The tax abatement strategy is very creative. It is typically used for taxpayers who have failed to file taxes for a few years. In such a situation, the IRS will often a e taxes to the individual based on a variety of factors. The strategy is to abate this a e ment and pay not tax by challenging the a e ed amount as being calculated incorrectly. The IRS says it doe t fly, but it is a very creative strategy.
3. Identity Theft/Phishing. This i t so much a tax reduction scam as a nightmare wherein identity thieves try to obtain information from taxpayers by acting as IRS agents. Often they send out email as though they are from the IRS. The IRS never sends emails to taxpayers, so dont re ond to these emails. If youre not sure, call the IRS and ask them if there is a problem. You can reach the IRS at 800-829-1040.
4 Credit Repair Companies You see these companies everywhere. Some are legitimate while others are not. The ones that are not charge high fees and do almost nothing other than putting taxpayers on some kind of a payment plan. The IRS is currently revoking the tax-exempt status of many credit repair companies.
5. Offshore Strategies A traditional area of angst for the IRS, offshore strategies continue to be closely watched. The IRS is hyper se itive to such strategies and tries to shut them down. In 2005, 68 individuals were charged and convicted for promotion offshore tax scams and thousands of taxpayers were audited with nightmarish results. If you want to go offshore, make sure you get qualified advice from a tax profe ional and attorney. Dont buy something off a web site.
There is a fine line between tax evasion and tax avoidance. Tax avoidance is legal while tax evasion is criminal. If you wish to pursue advanced tax pla ing, make sure you do so with the advice of a tax profe ional that is going to defend the strategy to the IRS.
The article is refered from http://www.bbcok.com, http://www.worldloanpro.com, please go to read more.
