2011 Dirty Dozen Tax Scams According to IRS, will be listed and explained to the informed Tax Payer.
# 10 Zero Wages - Typically Form 4852 (Substitute For W-2) or Corrected "1099" is used to Improperly reduce taxable Income to Zero. Taxpayer might submit statement rebutting wages and taxes reported by payer to IRS. Fraudulent tax payers explain on Form 4852 that company has issued erroneous W-2 and refuse to correct it for fear of IRS retaliation. Taxpayers should not participate in such schemes. Such Filings may result in $5000 penalty.
#11 Trust Misuse - Unscrupulous Promoters have for years asked taxpayers to transfer assets in to trusts to shelter or evade income tax. While many such transfers are legitimate, some highly questionable transactions promise reduction of Income subject to taxes, less deductions, and reduced gift or estate taxes. Such trusts rarely promise what they deliver and avoid income tax or shelter income illegitimately. Recently IRS has stepped up activities to monitor Annuity and Foreign trusts to shift Income & deduct personal expenses. Seek a trusted Professional before entering such trust arrangements.
#12 Fuel Tax Credit Scams - IRS receives claims for excessive Fuel Tax Credits.While some farmers who use fuel for off-highway business purposes, are eligible for fuel tax credit, other Individuals claim tax credit for nontaxable uses of fuel when their occupations & income levels make such claims unreasonable. Fraud involving Fuel Tax Credit is frivolous tax claim and can result in $5000 penalty.
For Q & A Contact :
Kash, @ Yajnik & Mehta Associates (925) 963 4891
Linked-In : kyajnik@yajnikandmehta.com
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Twitter : Kash_Yajnik@kash_yajnik
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