Each year, the Internal Revenue Service releases a list of the 12 most popular tax scams for the year. The 2008 list is out,
and I thought it would be fun to go through them individually to show
you how criminals are trying to take advantage of taxpayers. The basic
idea behind all of these scams is simple: prey on a taxpayer’s fear of
the IRS or their desire to avoid paying taxes.
information here to help avoid being taken advantage of by a scammer
who wants your money. And use this basic rule of thumb for any offer or
communication regarding taxes: If it sounds too good to be true, it
probably is. Don’t get fooled by claims regarding mysterious refunds or
tax bills. When in doubt contact the IRS directly for help with your
Retirement plans are an excellent tax planning tool, and if used correctly, can help manage or decrease your tax burden. But the plans and the rules are very complicated, and it’s tempting to try cheating with your plan.. hoping that the IRS will never catch up with you. This is a dangerous game to play, because it will be expensive once the IRS finds out.
One of the common ways retirement plans are abused is by trying to avoid contribution limits. Some investment advisers help taxpayers avoid the limits for Roth IRAs by lying about the value of assets that are moved into the accounts. By assigning a fake, lower value to the assets being moved, the taxpayer will be able to move more assets into the Roth account, but will be in violation of the rules.
If you’re moving assets into a retirement account, make sure that the correct fair market value is being properly claimed so you don’t run into trouble later if the IRS audits your tax returns.