The IRS recently released its “Dirty Dozen Tax Scams”, and some of the items on the list will be of particular interest to anyone concerned about asset protection. According to this article in NASDAQ.com, taxpayers should “exercise caution during tax season to protect themselves against a wide range of schemes ranging from identity theft to return preparer fraud.” But these tax scams the IRS warns of are not simply scams that could be perpetrated against taxpayers, but scams that could be perpetrated by taxpayers. The lesson here is that if you’re trying to get (or stay) rich by cheating the IRS not only is it not right, it’s not worth it.
The first scam on the list that might be perpetrated by taxpayers instead of against them is hiding offshore income. “U.S. taxpayers who maintain financial accounts abroad and who do not comply with reporting and disclosure requirements risk significant penalties and fines, as well as the possibility of criminal prosecution.” Fortunately, the IRS wants to give tax payers every opportunity to come clean about offshore income before they tighten up reporting requirements over the next few years. To this end, the IRS has reopened its Offshore Voluntary Disclosure Program.
The OVDP is designed “to help people hiding offshore accounts get current with their taxes.” According to the IRS website, “The program is similar to the 2011 program in many ways, but with a few key differences. Unlike last year, there is no set deadline for people to apply. However, the terms of the program could change at any time going forward.”
Some of the other scams taxpayers will want to avoid include:
* Claiming false or inflated income or expenses.
* Misusing trusts to illegally hide assets from the IRS.
* Falsely overvaluing charitable donations on tax returns.
* And more…
With the many and confusing IRS rules, regulations, and annual hoops to be jumped through, taxpayers can sometimes find that they’ve slid unknowingly or unintentionally into one of these fraudulent acts. This is why it is always in a wealthy taxpayer’s best interest to have an accomplished attorney on your side. An ethical and experienced attorney can help you protect your assets, avoid unnecessary taxation, and follow the letter of the law. For more information please contact my office.