Sheila McKinney

Wednesday, April 13, 2011

IRS TOP 12 TAX PROBLEMS LIST

The Internal Revenue Service has released its annual list of the
worst tax scams and has warned consumers to steer clear of these
schemes or facing significant financial penalities.

The scams on the list, which the IRS called the dirty dozen, are:

1) Hiding income offshore

2) Identify theft and phishing

3) Return preparer fraud

4) Filing false or misleading forms

5) Frivolous arguments

6) Nontaxable Social Security benefits with excessive credits

7) Abuse of charitable organizations and deductions

8) Abusive retirement plans

9) Disguised corporate ownership

10) Zero wages

11) Misuse of trusts

12) Fuel tax credit scams



Several of these scams may originate from tax preparers themselves,
for example, tax advisers have been know to recommend that clients
ignore limits on IRA account contributions and shift more money into
these funds at tax time, or transfer excessive assets into trusts as
a means to deduct more eprsonal expenses. In some cases, particularly
devious tax advisers may use these tactics to boost their clients
tax refunds and then skim more of the money from those refunds for
themselves.

WARNING TO TAXPAYERS - when signing your tax return, make sure you
understand the numbers and can substantiate all of the deductions,
credits and income shown on your tax return.


Remember to file by Monday, April 18th.