To remove your email from the subscriber's list, please follow the instructions on the email.

The Tax Prophet Newsletter   Issue # 72 April, 2009
<

REDUCE TAXES!
CHECK OUT THE TAX PROPHET'S Action Guides


In This Issue:
Introduction
Phishing
Offshore
Phony Forms
Charitable Deductions
Conclusion


Top Tax Scams for 2009

Introduction

this spring, IRS published its list of tax scams for 2009.

Many of the scams are familiar, such as frivolous tax protester arguments, bogus trust arrangements, sham companies, and crooked tax preparers; however, several newer cons involve the use of bogus information forms.

Here are the most notable schemes used by tax cheats.

Phishing

Internet-based scam artists use phishing to trick unsuspecting victims into revealing personal or financial information.

This particular phishing scam does not involve taxpayers cheating on their taxes; instead, criminals are impersonating IRS and sending emails to steal financial information from taxpayers.

Note: IRS never uses email to communicate with taxpayers.


Hiding Income Offshore

High on IRS hit list are tax schemes involving off-shore companies and foreign bank accounts.

In addition, IRS is focused on foreign banks which facilitate tax fraud by providing debit cards, credit cards, wire transfers, electronic funds transfer and payment systems, offshore business merchant accounts and private banking relationships.

To counter these ploys, IRS is pushing voluntary disclosure by taxpayers of their foreign accounts before they get caught.


Phony Forms

Tax-scam artists create fake information returns to claim bogus withholding credits used to produce false claims for tax refunds. Form 843 (Claim for Abatement) is being used to eliminate taxes owed by falsely claiming there was an error in calculating the basis in property sold or in the value of property received for services rendered.

Fraudsters are drafting sham information forms, such as Form 4852 (Substitute Form W-2) or a "corrected" Form 1099 to report zero compensation, and then filing phony returns based on the bogus information forms.


Charitable Deductions

Charitable abuses include:

    (i) efforts by donors to retain control over donated property;

    (ii) false overvaluations for donations of real estate easements and stock of non-public companies; and

    (iii) side deals involving the repurchase of donated property at a fraction of the dollar amount claimed as a charitable donation.


Conclusion

Using the internet, a foreign bank account may be opened or an off-shore company may be created with a couple of button clicks.

There is little doubt that Facebook, Twitter and other Web 2.0 social networks and communications will become fertile grounds for a new generation of tax-scam artists.

To combat tax fraud, IRS constantly reminds the public that whistleblowers who provide allegations of fraud by filing Form 211 may be eligible for a reward. Sometimes, the reward can be quite substantial.




Home | Who We Are | What's New | Search | Contact Us | Subscribe

|
All contents copyright 2009 Robert L. Sommers, attorney-at-law. All rights reserved. This newsletter provides information of a general nature for educational purposes only and is not intended to be legal or tax advice. This information has not been updated to reflect subsequent changes in the law, if any. Your particular facts and circumstances, and changes in the law, must be considered when applying U.S. tax law. You should always consult with a competent tax professional licensed in your state with respect to your particular situation. The Tax Prophet is a registered trademark of Robert L. Sommers.