IRS Alert: “Tax Payers Need to be on the Look out for Fraud"
E-filing alert - tax payers need to watch out for these - http://www.tax-definition.org
New York, NY (PRWEB) March 28, 2005 – Tax-Definition.org (http://www.tax-definition.org) 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
Tax Forms for E-filers:
http://www.tax-definition.org/tax-forms
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
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(C) 2005
Tax-Definition.org
http://www.tax-definition.org
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Source : http://www.prweb.com/releases/2005/3/prweb222197.htm