| Every year, the IRS issues a list of the top | | | | about their authenticity, call the agency. |
| tax scams the agency is seeing. Known as the | | | | |
| "dirty dozen", here are some highlights of | | | | 3. Structured Entity Tax Credit - The IRS is |
| the 2007 list. | | | | attacking an inventive scheme involving state |
| | | | conservation tax credits. The strategy works |
| 1. Telephone Tax Refund - This one has the | | | | by having people set up partnerships that |
| IRS hot and bothered. For the first time in | | | | invest in state conservation credits. The |
| recent memory, the IRS has started launching | | | | credits are eventually used up and a K-1 is |
| audits before the tax filing season has even | | | | issued to the partners who then take the |
| ended! Why? The telephone tax refund is being | | | | credits on their personal return. The IRS is |
| abused. The refund is the result of court | | | | arguing that there is no legitimate business |
| rulings that a long-distance phone tax was | | | | purpose for the partnership, which makes the |
| being collected illegally. The IRS is | | | | strategy fraudulent. |
| allowing recovery of this tax for the past | | | | |
| three years, but people are claiming | | | | 4. Charity Abuse - An oldie, but goodie. The |
| outrageous numbers. If you do this, beware | | | | IRS is hunting people that misuse charitable |
| there is an extremely high chance the IRS | | | | organizations. The idea is to contribute |
| will be auditing you. | | | | assets to the charity for a tax break. The |
| | | | problem is the contributors retain control of |
| 2. Phishing - The IRS is warning taxpayers | | | | the assets, which makes it a sham |
| about phishing scams designed for the | | | | contribution in the opinion of the IRS. There |
| purposes of identity theft. Scam artists are | | | | are other strategies as well. The important |
| sending emails purportedly from the IRS to | | | | thing to understand is the IRS is very |
| taxpayers suggesting that a form needs to be | | | | aggressive when it comes to charitable tax |
| filled out to obtain something, often a | | | | strategies, so make sure you are getting |
| refund. The link in the email takes you to a | | | | legitimate advice. |
| site that looks like the IRS site, but is | | | | |
| not. Once you provide your financial | | | | People hate paying taxes. Tax avoidance |
| information, you receive no refund but your | | | | strategies are entirely legal and should be |
| identity is used to carry out fraudulent | | | | taken advantage of. Tax evasion, however, is |
| transactions. The IRS never sends taxpayers | | | | not. Make sure you know where the fine line |
| emails, so go ahead and delete all "IRS" | | | | is. |
| emails you receive. If you have any doubts | | | | |