Frivolous Tax Claims

There are so-called “tax experts” who would charge you for information that they claim will help reduce your tax liability. Often this information turns out to be frivolous or downright fraudulent. Here are some tax scams to be avoided.
Very few taxpayers actually qualify for deductions for fuel usage. Be careful with this deduction, the IRS considers it frivolous in almost all cases.
Be careful of anyone offering tax shelters that will hide your money from the IRS. While there are plenty of legitimate shelters like 401Ks, IRAs, Educational Savings Accounts, Health Savings Accounts, and others, actually hiding money from the IRS is illegal. Be practical about what sort of tax shelters you choose.
Some tax cheats will advise you to file an IRS Form 4852 (Substitute Form W-2) or a corrected Form 1099 and reduce your taxable Consultant Agreement Shrm income to zero. This is an outright tax fraud and the Internal Revenue Service is very aware of its perpetration.
Attempting to hide money in offshore accounts was once a reportedly popular practice with the rich. Well, it is not popular anymore. The IRS now monitors the bank accounts of U.S. citizens with funds in foreign banks as stridently, if not more, than Consulting Support it monitors U.S. banks. While there is nothing wrong with maintaining foreign bank accounts, you must report the account and the money to the Internal Revenue Service or face penalties up to $10,000 on top of what you owe, along with interest.
Donor-advised funds were created so that a person could make a large charitable donation, spread the payments out over years, and claim the total amount as a charitable donation for a single tax year. This is a complicated deduction and the IRS almost always audits those making it, in order to find mistakes and pull the deduction down.
Unfortunately, people hired to prepare taxes often commit fraud against the IRS and their own clients by inflating a refund through false deductions and credits. The IRS often has difficulty prosecuting these individuals because of their effective closeting within the corporate structure. Most times, the IRS just skips the person who prepared the taxes and goes right after the taxpayer, which is the person from whom they have every intention of getting their money back anyway.
There are several other tax frauds and scams to be mindful about, such as fake corporations, claims of the unconstitutionality of taxes, and misuse of trusts.
Always be certain that your tax credits, deductions, and exemptions are legitimate. Do not listen to the advise of anyone, “expert” or not, who advises you to stretch the credence of your claims or to fudge the numbers.

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