Tax-Definition.org (
http://www.tax-definition.or
g ) 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-def
inition.org/tax-forms
About the author:
Howard Schwartz is a partner in several business strategy
groups, including HJ Ventures International, Inc. For more
information:
http:
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//www.tax-definition.org/Define-Electronic-filing.html
