IRS ‘Dirty Dozen’ Tax Scams for 2014, Part 2 — False Income, Fake Charities & More
Yesterday we took a look at some of the dirtiest, nastiest, most mean-spirited tax scams around. Just in case you haven’t had your fill of tax scams yet, and are wondering if there are more tax swindles out there (yes, many), we’ve got you covered.
Here’s the second half of the IRS’s “Dirty Dozen” tax schemes for 2014:
Using a False 1099 Form and Falsely Claiming Zero Wages
Using the wrong tax form (even if your employer insists upon it), or falsely claiming zero wages in order to get out of paying taxes is a big no-no with the IRS. You can be sure they’ll be looking out for this kind of scams.
Impersonation of Charitable Organizations
A man or woman asking for money for a charitable organization might be legit, or he or she might be trying to rob you. During times of disaster (think hurricanes, floods, etc.), victims and charitable souls are especially vulnerable to these types of rackets.
Abusive Tax Structures
Benefitting from financial-secrecy laws in foreign trusts or offshore financial institutions is taking advantage of abusive tax structures, as far as the IRS is concerned. Criminal prosecution for people involved in these schemes is a strong possibility.
The IRS maintains a list of frivolous tax arguments that have already been tossed out of court. If you’re planning on some outlandish argument to avoid paying taxes, chances are someone has already tried it before, and lost.
False Income and Exemptions
The IRS frowns upon lying about your income, expenses and exemptions in order to maximize refundable credits. Lots of people do it, but that doesn’t mean Uncle Sam isn’t keeping an eye out for such shenanigans.
Misuse of Trusts
Dubious transactions that hide assets and money from the IRS are considered a misuse of a trust. Hiding income from the government, and creditors, is a very old game, but can often fall under the heading of “dirty tax scam.”