Abusive tax schemes can take a multitude of forms. They can include anti-tax law, misstatement of a home based business, trust fraud, and fraudulent off-shore activities. One of the most common forms is the preparation on fraudulent tax returns. By misstating income, deductions, and taxes paid, people have found a way to show mammoth tax refunds with hopes that the IRS won’t catch their errors and will pay the refund. There have been a number of cases in recent years where people claimed refund in the MILLIONS of dollars.
Retirement plans are also a common source of tax fraud. People may report fraudulent withdrawals and/or contributions in an effort to gain a tax benefit.
Finally, one of the great benefits that the IRS provides are those to tax exempt organizations. In many cases these are charities. While the benefits are wonderful and meant for those who need them the most, this has not stopped criminals from taking advantage of those and forming fake or fraudulent organizations.
Keep in mind that these are just a few of the many ways criminals make an effort to trump the system. If you become aware of any of these scams make sure to report them to the IRS ASAP. Remember, these types of crimes hurt us all.
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