Industry News

IRS warns of common tax schemes

Taxpayers beware of falling victim this tax season

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The IRS this tax season has alerted taxpayers to avoid falling victim to one of the most common tax scams and a variety of other schemes. In the new 2004 ranking, several new scams have reached the top of the consumer watch list, including abusive trusts and the "claim of right" doctrine. In addition, the IRS has taken a new step this year and issued 10 new pieces of legal guidance involving scams in the "Dirty Dozen" and other tax schemes. The new guidance debunks the schemes and provides new legal details to help tax practitioners and taxpayers. "At the IRS, we're augmenting our enforcement resources to attack schemes and scams. While we're actively targeting promoters, taxpayers themselves should be wary of anyone who promises to eliminate their taxes," said IRS Commissioner Mark W. Everson. The IRS urges people to avoid these common schemes, among others: "Misuse of Trusts," occurs when promoters of abusive tax transactions urge taxpayers to transfer assets into trusts. The ...