The Internal Revenue Service issued the 2006 "Dirty Dozen" -- the annual round-up of some of the most notorious tax scams.
Two new schemes have worked their way onto the list this year. In recent months IRS personnel have noted the emergence of the two scams -- "zero wages" and "Form 843 tax abatement" -- in which filers use IRS forms to claim that their tax bills have been wrongly inflated.
Also high on the list is "phishing," a favorite ploy of identity thieves. Over the past few years, the IRS has observed criminals working through the Internet, posing even as representatives of the IRS itself, with the goal of tricking unsuspecting taxpayers into revealing private information that can be used to steal from their financial accounts.
Several of the usual suspects from last year remain on the list. The IRS, for example, continues to see schemes designed to exploit charitable organizations. Some taxpayers, meanwhile, still use frivolous arguments to claim they do not owe taxes, despite the fact such reasoning has been thrown out of court time and again.
The IRS also urges people to avoid these other common schemes, referred to as:
- Zero Return;
- Trust Misuse;
- Frivolous Arguments;
- Return Preparer Fraud;
- Suspect Credit Counseling Agencies;
- Abuse of Charitable Organizations and Deductions;
- Offshore Transactions;
- Employment Tax Evasion; and,
- "No Gain" Deduction.
Two noteworthy scams have dropped off the list this year -- "claim of right" and "corporation sole." IRS personnel have noticed less activity in these scams over the past year, following court cases against a number of promoters.A full explanation of the scams, as well as information on how to report suspected tax fraud activity, is available at http://www.irs.gov/newsroom/article/0,,id=154293,00.html .
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