TOP DRAWER ARTICLE
Tax Scams
by
HL Carpenter
The good, the bad and the fraudulent. Those are the three main categories of tax advice.
As you might expect, the Internal Revenue Service is particularly concerned about the third one. To keep you from becoming a victim of tax scams, the Service releases a list every year describing common frauds.
Here are six that made the list in 2007:
- Filing for a larger amount than the standard credit allowed by the new Telephone Excise Tax Refund without the proper paperwork.
- Shifting undervalued property to a Roth IRA.
- Claiming zero wages on Form 4852 (Substitute Form W-2) or a “corrected” form 1099.
- Filing a reduced taxable income claim using the American Indian Employment Credit.
- Using alleged donations to charitable organizations to improperly shield income or assets.
- Frivolous arguments that suggest filing a tax return and paying taxes is voluntary.
No matter who prepares your return, you are responsible for the information on it. So here’s some good advice: Protecting yourself from scams like these is a wise move.
Originally published April 2007.
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HL Carpenter, an experienced investor and a CPA, specializes in reader friendly financial and tax topics for individuals and small businesses, and publishes Top Drawer Ink, a newsletter that's chock full of humor and common sense information.
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This information should not be considered legal, investment or tax advice. Top Drawer
Ink Corp. does not provide legal, investment or tax advice. Always
consult your legal, investment and/or tax advisor regarding your
personal situation. |
Last update: December 30, 2009
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