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