Washington (Aug. 28, 2003) -- Scams and fraud in the automotive sales industry have increased over the past three years, according to the Internal Revenue Service.
These range from aiding narcotics traffickers launder their ill-gotten gains to submitting false loan documents to financial institutions to obtain car loans.
The IRS says that special agents of IRS Criminal Investigation have investigated and recommended prosecution of numerous individuals in the automotive sales industry. These investigations vary from tax evasion to employment tax fraud to money laundering conspiracies to violations of the Bank Secrecy Act. There are currently more than 1,000 open audits of the tax returns of new and used car dealers for a variety of issues.
One scheme that has surfaced regards Form 8300, which must be filed with the IRS when a cash payment of over $10,000 is received in a trade or business. Some dealers are using an "IRS Form 8300 Exemption Certification" that can be filled out by the potential client to exclude the business from filing the required form. According to the IRS, "There is no such clause or certificate."
-- WebCPA staff
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