Summary of the IRS dirty dozen tax schemes
Title: Avoiding Tax Scams Author: James H. Dimmitt word count: 604 wrap: 60 per line url: http://www.yourfreecreditreportnow.com maito: support@yourfreecreditreportnow.com
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Avoiding Tax Scams by James H. Dimmitt
“Pay less taxes”
”We can teach you how to avoid paying Federal Taxes”
“We'll show you how to get a bigger tax refund ... for just $29”
With the end of tax season just weeks away, many taxpayers will fall prey to scam artists who appear to want to help you keep your money, when in fact they are stealing it right from under your nose.
Worse yet, taxpayers can face heavy fines, payment of taxes owed with interest and penalties, and even imprisonment for taking part in these scams.
Here is a list of the “dirty dozen” tax scams which the IRS urges you to avoid:
1) Offshore Transactions - Use of an offshore account, trust or other arrangement to hide income or claim false deductions is illegal.
2) Identity Theft - beware of any suspicious letter from a bank requesting you to verify personal information in relation to your taxes. It may be a trick to try to defraud you and steal your identity.
3) Phony Tax Payment Checks - Con artists will try to sell false checks to use to make your tax payment. These checks have no financial value and are worthless.
4) Slavery Reparation Credit - There is no such credit due to african-american taxpayers as reparations for slavery. Beware of anyone offering to prepare your taxes who offers to file this credit for an additional fee. The IRS reports that this was the #1 scam of 2002.
5) No Taxes Withheld from Wages - it is illegal to ask your employer not to withhold federal income tax from your wages. This scheme is based on an invalid interpretation of tax laws.
6) Improper Home-based Business - you cannot deduct personal expenses and try to pass them off as business related expenses by setting up a “bogus” home-based business.
7) You've won a prize ! But you have to pay the taxes first - a caller will inform you that you've won a fabulous prize but in order to claim it you must pay the income tax due on the prize's value. Baloney ! Any taxes due for winning a prize are payable to the IRS, not the company or person offering the prize.
8) The Secret That Lets You Not Pay Taxes, only $49.95 - there is no secret way not to pay taxes. The U.S. courts have shown such arguments to be frivolous no matter what you've heard about taxes being “voluntary”.
9) Social Security Tax Scheme - in this scam someone will offer to get you a refund of your social security taxes or overpayment for a fee and a percentage of the refund. There is no such thing as overpayment of social security taxes or a refund due to taxpayers.
10) Bigger Refund for a Fee - don't believe anyone who offers to help you get a bigger refund, especially without knowing what your tax situation is.
11) Sharing or Borrowing Earned Income Tax Credit (EITC) - it it illegal to split or share legitimate EITC in order to get the maximum credit allowed.
12) Home Collection of Taxes Due - Beware of anyone claiming to be an “agent” of the IRS and visiting your home to collect your tax payment. A legitimate agent of the IRS will carry a picture ID and normally call before any such visit. Also the IRS does not go door to door to collect payments.
More information about tax scams and schemes is available at the IRS home page www.irs.gov. Taxpayers who suspect tax fraud should contact the IRS hotline at 1-800-829-0433
Plain and simple there is no secret way to avoid paying taxes.
************************************************************ © 2003, James H. Dimmitt James is editor of "TO YOUR CREDIT", a bi-weekly free newsletter. Subscribe to the newsletter by visiting http://www.yourfreecreditreportnow.com. You'll be able to get a copy of your personal credit report absolutely FREE.
About the Author
James Dimmitt is author of "Identity Theft - How To Avoid Becoming the Next Victim!", visit http://tinyrul.com/bc45 for more information