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Watch out for tax scams! (Second of two parts)

Last week we posted the first six of the IRS’ recently released 2013 version of its annual “dirty dozen” scams. Here’s the second half of the worst:

  1. Inaccurate income and expenses.  Falsely stating income and expenses to make you eligible for larger credits may initially yield a bigger refund, but when the IRS examines the return, the fraudulent refund must be repaid, along with penalties and interest.
  2. False 1099 refund claims. This scam occurs regularly, where the perpetrator files a false information return (such as Form 1099-OID) to claim a refund on a corresponding tax return. If you’re a party to filing false returns you could be liable for financial penalties or face criminal prosecution.
  3. Frivolous arguments. If you disagree with your tax liability you have the right to contest it in court. Don’t attempt to use the frivolous tax arguments on the IRS’ list, or expect to be penalized.
  4. Falsely claiming zero wages.  Again, expect penalties from the IRS when your claim is found to be fraudulent.
  5. Disguised corporate ownership.  Sometimes corporations are formed to obscure the true ownership of a business, or to underreport income or claim fictitious deductions.  Needless to say, the IRS frowns on this activity and enforces repercussions.
  6. Misuse of trusts. Beware of unscrupulous promoters promising tax benefits by hiding assets in trusts.  Always seek professional assistance before entering a trust arrangement.

We can help ensure none of the dirty dozen scams affects you or your return. Contact us at Patrick & Robinson CPAs: or 904-396-5400.

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