New York, NY (PRWEB) March 26, 2005 -
Â The Internal Revenue Service (IRS) has released a report on tax scams and Tax-Definition.org (http://www.tax-definition.org) is happy to share them with tax filers to alert them to any potential issues -
Tax Tips for E-filers: http://www.tax-definition.org/tax-tips
There have been many cases of tax scams that have been unveiled by the Internal Revenue Services (IRS) in their annual listings called the ÂDirty DozenÂ. There are various tax agencies and schemes that have been listed for making false claims to the taxpayers.
Studies have shown that most of the tax agencies manipulate the tax laws and try to look for the loopholes in them for tax deductions and benefits. Getting involved in tax scams can be avoided if you understand the concepts on which some of the fraud tax agencies work.
Most of the credit counseling agencies that claim to help you in fixing your credit ratings should be avoided. They generally aim at charging high fees, or monthly charges that add to your debt.
The IRS Tax Exempt and Government Entities Division is making audits on such agencies to avoid the exploitation that takes place due to the debts of low-income customers. The agencies are tax-exempt, yet they charge high fees for providing credit and debt counseling to their customers.
There are many unscrupulous tax agencies that advise the tax filers to move all their assets in a trust. According to them, by putting your assets under a trust you will be able to reduce your taxes, as the income that is subject to tax will become lower. This will show deductions in your personal expenses due to your reduced estate. You will be expected to pay lower gift taxes.
However, most of the agencies that make suck promises fail to deliver them. It is important for the taxpayer to hire a qualified professional to help out in matters like entering a trust. On the other hand, even the IRS is keeping an eye on such agencies.
Some of the agencies want their customers to utilize a Âclaim of rightÂ doctrine. According to this, a taxpayer tries to file a return with an aim to get a deduction that is equivalent to the wages that he/she gets. Such a deduction is placed under is interpreted wrongly and has no basis in law.
Therefore, a taxpayer must gather all possible information before falling in the trap of fraud tax agencies. The real clause in the Internal Revenue Code is manipulated by such agencies that propagate tax scams.
Filing a return is optional, wages cannot be considered as income, and there are amendments in the tax codes that discriminate against the tax payers are a few of the false arguments that are advertised by the tax agencies. One should not fall for any of these lousy statements. They have been challenged and thrown out of the courts.
More and more of such scams have been unearthed that refute, or manipulate different arguments and codes for tax exemption. A tab on the identity thefts; on the telephone, Internet, and frauds posing as IRS members; is essential.
If the IRS catches hold of such con agencies and people involved with them; fine and imprisonment are inevitable. But, even the tax payer should be aware of all the legalities involved in filing their taxes to avoid taking help from outside.
Stay tuned for our second report on what tax payers / electronic filers need to watch out for: http://www.tax-definition.org/Define-File-a-return.html
You can also review Tax deinitions here: http://www.tax-definition.org/Define-Form-1040.html
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