Tax Scams For 2013
Every year the Internal Revenue System puts out a list that they call the “Dirty Dozen.” The “Dirty Dozen” is a list of the top tax scams that affect taxpayers.
Here is a look at this year’s “Dirty Dozen:
1. Identity Theft
2. Phishing. A phishing scam is when a person attempts to steal your information through either emails or fake websites.
3. Return Preparer Fraud. Though most tax professionals are honest, professional people others are not. Some tax specialists will attempt to encourage filers to claim improper credits, deductions or exemptions to increase their tax return.
4. Hiding Income Offshore. Having money in an offshore account is not illegal. What is illegal is to hide it offshore accounts for the purpose of not paying United States taxes on the funds.
5. “Free Money” from the IRS & Tax Scams Involving Social Security. Even though there is no such thing as Free Money scammers try to convince potential victims otherwise.
6. Impersonation of Charitable Organizations. Every time disasters happen, scammers strike.
7. False/Inflated Income and Expenses. This is when taxpayers are encouraged to bump up their income in order to maximize their refundable credits.
8. False Form 1099 Refund Claims. This is basically a redemption scheme. This is where a person files a series of false tax forms to gain a fraudulent tax return.
9. Frivolous Arguments. This is where scammers encourage taxpayers to make unreasonable and outlandish claims to avoid paying the taxes that they owe.
10. Falsely Claiming Zero Wages. Taxpayers are too often convinced that they can reduce their taxable income to zero.
11. Disguised Corporate Ownership. Here scammers attempt to hide where there income is really going or they manufacture false deductions.
12. Misuse of Trusts. Trusts have many legitimate purposes, but many people use trusts illegally to get out of paying the amount of taxes that they owe.
Categories: Federal Tax, Tax Evasion Tags:
Tax Breaks Were Instrumental in Reaching State Budget Deal
As part of a new budget deal, Republican and Democratic lawmakers approved 16 tax breaks that are worth an estimated $13 million. These breaks in taxes would aid restaurants, mint farms, nonprofit gun clubs, beekeepers, and international investment firms.
These exemptions in taxes were necessary for Senate Republicans to agree to end current tax breaks for residential phone service that they expect will net around $85 million by 2015.
Rep. Reuven Carlyle of Seattle says, “In addition to ending the tax break for phone service, Democrats also got an agreement to set expiration dates on tax breaks, and to disclose the value of future exemptions. The only way we were able to get the bill through was because of that.”
The new breaks in taxes will open opportunities to create jobs and stimulate the economy.
The House and Senate approved the operating budget on Friday. The breaks in taxes are contained in a separate measure, Senate Bill 5882; both cleared both chambers with large majorities.
Senate Democratic Leader Ed Murray, D-Seattle, said “Tax breaks can serve a useful purpose. Tax loopholes we absolutely need to close, but there are tax incentives that I think are valid. (In the past) we closed the tax loopholes for banks, but we gave one to newspapers and the dairy industry … Not every tax break is necessarily bad.”
Some of the tax breaks that were approved just extended exemptions that were due to expire. The beekeepers one alone is worth $120,000 over two years.
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Man Charged in Alleged Mitt Romney Tax Scheme
Michael Mancil Brown, 34, of Franklin, Tennessee has been formerly charged after he allegedly claimed that he had former GOP Presidential candidate Mitt Romney’s income tax returns. This alleged activity took place in 2012 during Romney’s presidential campaign, court documents state.
Brown is charged with six counts of wire fraud and six counts of extortion. A federal grand jury indictment was filed in the United States District Court in Nashville, Tennessee on Wednesday June 27, 2013.
According to the allegations Brown sent an anonymous letter to the offices of accounting firm PricewaterhouseCoopers LLP located in in Franklin, Tennessee. The letter was received in the height of 2012’s presidential campaign. In the letter Brown allegedly demanded $1 million in the digital currency Bitcoin in exchange for the copies of Romney’s taxes that Brown alleged were in his possession.
The letter was delivered just before the Republican and Democratic national conventions. It stated that parties could get the alleged “tax forms released in exchange for $1 million in Google Bitcoins.”
Allegedly Brown claimed to have come into possession of Romney’s tax information after he accessed PwC’s internal systems. The indictment found these claims to be false.
At the time Romney had refused to release his tax returns from before 2010.
The charges that Brown faces in the indictment are merely accusations. He is still innocent until he is proven guilty.
These charges against Brown were investigated by the Nashville Field Office of the U.S. Secret Service with assistance from the Nashville Resident Agency of the FBI.
Brown faces charges of extortion and wire fraud. He continues to maintain his innocence.
Categories: Federal Tax, Income Tax, Tax Evasion, Tax Law Tags: