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