Avoid The "Dirty Dozen" Tax Scams

It’s nice to save money at tax time, but watch out your preparer isn’t leading you into a scam, like these on the IRS top twelve to watch out for this year:

    1. Telephone Excise Tax Refund Abuses: Early filings show some individual taxpayers have requested large and apparently improper amounts for the special telephone tax refund.

    12. Frivolous Arguments: Promoters have been known to make the following outlandish claims: the Sixteenth Amendment concerning congressional power to lay and collect income taxes was never ratified; wages are not income; filing a return and paying taxes are merely voluntary; and being required to file Form 1040 violates the Fifth Amendment right against self-incrimination or the Fourth Amendment right to privacy….

We had an accountant recently tells us we needed to report our home office as larger than it really was… also they wanted us to look over our girlfriend’s credit card statement and see if we could “find” any deductible items she “bought for us” that we later “paid her back for…” Needless to say we found a new accountant. — BEN POPKEN

IRS Announces “Dirty Dozen” Tax Scams for 2006 [IRS.gov via Consumer Affairs]

[Photo: judgmentalist]

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  1. Karl says:

    Here’s a link to the IRS’s site for the 2007 “Dirty Dozen.”

  2. RumorsDaily says:

    I had a law professor who stated that you could indeed claim a fifth amendment privilege if filing a tax return was going to be self incriminating. As I recall it didn’t mean that you didn’t have to pay taxes on your ill-gotten income, but I do think that you THEORETICALLY could write “I WANT TO ASSERT MY FIFTH AMENDMENT PRIVILEGE” on the forms and attach a check for what you should owe… thereby avoiding stating where you’d actually earned the income.

    Go check with your own lawyer about that, though. I don’t think anyone’s actually tried this in a non-stupid manner.

  3. kt says:

    The DVD “America: Freedom to Fascism” makes the frivolous arguments noted above. Basically, they claim that it is unlawful for the US Fed Govt to tax wages as income, and that the Fed Reserve is some kind of hellspawn conspiracy by “the bankers” to control the world.

    If you have Netflix, you may be able to “watch it now” via streaming video. My advice is to watch and enjoy it, but take NONE of it seriously.

  4. adamondi says:

    Ben, your accountant sounds a lot like a bankruptcy attorney that my parents used to declare bankruptcy several years back. He “advised” them to go out and buy a couple of brand new cars, max out their credit cards, and generally go nuts before they actually declared bankruptcy because all of that would get “wiped away” with the bankruptcy. My parents did not heed that advice, thank goodness.