Tax Avoidance Schemes
Tax avoidance schemes have long been
misunderstood by taxpayers. The IRS' publication 3995 called
Recognizing Illegal Tax Avoidance Schemes outline different
ways tax avoidance schemes could appear to taxpayers. Most tax
avoidance schemes appear to have tax saving benefits that are
too good to be true and yes they are not true and the IRS will
penalize if caught. Many taxpayers think that the IRS are out
to get them for tax avoidance schemes. However, most taxpayers
that buy into the concept outlined by these tax avoidance
schemes don't even realize that they are victims.
Benefits and selling points tax avoidance
Some of these phrases may be familiar to
taxpayers who have been or were almost victims of tax avoidance
schemes. While some tax reduction strategies may be honest,
there are way too many tax avoidance schemes and if you want to
get into a tax reduction strategy, you better ensure that it is
not one of the illegal tax avoidance schemes heavily penalized
by the IRS with stiff penalties and interest.
"Never pay taxes again"
"Deduct the cost of your personal
"The IRS doesn't want you to know about
"I can get you a big refund"
"Share or borrow EITC (earned income tax
"Put your money in a trust and never pay
Illegal strategies to avoid taxes
intentionally omitting income
overstating the amount of tax deductions
keeping two sets of books
making false entries in your books and records
claiming personal expenses as business expenses
claiming false deductions
hiding or transferring assets or income
My tax preparer filed my tax return with
some of these tax avoidance schemes, will I be penalized?
The IRS heavily prosecutes any tax preparers
who make fraudulent claims and using any tax avoidance schemes.
Taxpayers can also be subject to civil and/or criminal tax
penalties if false claims or fraudulent, illegal tax avoidance
schemes are used on their tax returns. Overall, even if the
taxpayers use the services of tax preparers, they are still
responsible for the content of their tax returns. Both the tax
preparers and the taxpayers can be penalized.
Reporting tax avoidance schemes
If you have questions on any tax avoidance
schemes, you can contact the IRS at 1-800-829-1040. To report a
tax avoidance scheme, call 1-800-829-0433 or 1-866-775-7474 or