• June 10, 2016
  • admin
  • 0

The US government has lost almost $3 trillion to tax evasion, during the last decade alone. This is a serious and persistent issue that results in accumulated national debt and budget deficits. To make up for the losses, US taxpayers are required to pay extra tax dollars out of their pocket every year. A study by Demos.org shows that in 2010, on an average, every taxpayer, paid an extra $2,200 to offset the losses attributable to tax scams. These losses occurred not only due to tax evasion, but also due to the ill-tactics of tax planning agencies that resorted to unlawful avenues to help their customers with tax evasion.

Keep your Guard Up

One of the ways to protect yourself from tax scams is being aware of the dubious tax planning tactics deployed by agencies that claim to help you save hundreds of thousands of tax dollars. To help ensure you never find yourself on the wrong side of the law, let’s take a look at four common tax frauds that also found their way to the IRS’ list of tax scams:

1. Identity Theft

Inarguably, one of the most common tax scams, identity theft happens when scammers wrongfully obtain a legitimate taxpayer’s identity to commit fraud. Among other damages, these unscrupulous entities often use the personal information to claim tax refunds. The best way to tackle such cases of fraud and deception is to notify the IRS, by filling out this form, and sending it to their Lead Development Center, enclosing any promotional material received from the scammers.

2. Covert Offshore Accounts

Many illegitimate tax saving agencies suggest clients to create offshore accounts and keep withdrawing funds via wire transfer, credit cards, and debit cards. Maintaining offshore accounts is not illegal, given the condition that both you and your service provider will comply with the reporting requirements. Any deviation can result in heavy penalties followed by a possible criminal prosecution. To avoid the situation, all dues must be cleared with immediate effect, and all incomes and expenses must be disclosed at the time of tax filing.

3. Fake Charities

Be cautious of people or organizations masquerading as charitable institutions soliciting funds from taxpayers for a greater good. Some even go to the extent of claiming to represent the IRS and assure that the money will be used for some social cause. To prevent such instances from happening, you should avoid sharing any personal information with third parties and also making any cash payment. Transactions through card or check are better ways of making any payment, as they are  easily documented.

4. Abusive Tax Shelters

Abusive Tax Shelters are various dubious methods to evade taxes, which violate the Internal Revenue Code (IRC) and related statutes. The characteristics of these schemes involve of Limited Liability Partnerships (LLPs), Limited Liability Companies (LLCs), and International Business Companies (IBCs), offshore credit/debit cards, and other instruments. The schemes often involve multi-layer transactions for the purpose of hiding the type and ownership of the taxable income and/or assets.

The Way Forward

The common tax scams mentioned in this post are part of the list compiled by the IRS every year – “The Dirty Dozen” – after considering the various scams faced by taxpayers during the year. Most of these scams peak during tax filing season as most taxpayers prepare their tax returns at the last moment.  Prevent falling prey to an IRS scam by being alert and be careful about any contact you receive from the IRS. The IRS will send letters via US Postal Service as a first line of contact.

Please follow and like us:

What Our Clients Have to Say

Susan WilsonSusan Wilson
03:27 25 Jan 23
I have been very pleased with the solid counsel and guidance that Nick Nemeth has provided me regarding my tax issue. I found him to be honest and straightforward which I appreciated. I was impressed with his relevant experience and knowledge . He has definitely brought me peace of mind during a difficult and stressful time.
Sarah HowardSarah Howard
03:44 14 Nov 22
I would like to thank Mr. Nick and his staff for the superb help that I received from them. My IRS problem was resolved quickly and efficiently. It took 2 visits to convince me that I was over my head. I thought that I could call the IRS, appeal my tax notices and settle on a payment plan on my own. After many phone calls to the IRS, waiting sometimes more than 4 hours with no resolution to speak of, it proved to be extremely difficult and stressful. Revisiting Mr. Nick was a huge wake up call. My account was reviewed, and a payment plan was established with the IRS within a week. I will be forever grateful to the staff who worked on my case and especially to Lorna who listened to me vent while going through this painful process.
00:33 07 Aug 22
I cannot say enough good things about Nick and his team. When I first met with Nick he was up front, honest, friendly and efficient. When I worked with one of his attorneys, Eric B, I was just as pleased. All of the staff there are nice and very helpful. I wish I hadn't waited so long to get help with my issue. Over 6yrs I tried getting through and getting anywhere with the IRS and hardly made any progress. I know this may not be the case for all, and even I thought it would take longer than it did, but 3mos and they had my situation straightened out. I still can't believe it. Thank you thank you THANK YOU for all that you did for me. This is a huge burden gone out of my life now thanks to you. If anyone needs help out there, I know you may not want to shell out more money to get their help but it may just save you in the long run.
Spoilly GirlSpoilly Girl
23:49 03 Aug 22
The Nemeth Law team is exceptional. They treat their clients like a family member who is in crisis. They want you to get the best possible outcome. I really appreciate everything that they did for me. Jake and Ashley had the greatest role in my case and it all turned out for the best for me. Thank you Nick and team for easing my fears and getting me through the long process. I'm truly grateful.
Eddie WaltEddie Walt
19:44 12 Jul 22
During a time in which competent, professional service at a fair price seems to have disappeared, Mr. Nemeth and his team are a refreshing breath of fresh air.From my first phone call to the final settlement of our case with a non-responsive IRS, they under-promised, over-delivered and were in constant courteous contact to make sure we knew exactly what was happening and where we stood.I hope to never need their services again, but, should I receive another friendly letter from the IRS...I know who to call!
Quick Inquiry


    Enter the text you see above