IRS Issued Cautionary Note Regarding “2011 Dirty Dozen Tax Scams”

IRS on April 7 issued a cautionary note regarding the “2011 Dirty Dozen Tax Scams.” (IR 2011-39) The “Dirty Dozen” list includes the following—hiding income offshore; identity theft and phishing; return preparer fraud; filing false or misleading forms; frivolous arguments; nontaxable Social Security benefits with exaggerated withholding credit; abuse of charitable organizations and deductions; abusive retirement plans; disguised corporate ownership; zero wages; misuse of trusts; and fuel tax credit scams. According to the agency, it works with the Justice Department to pursue and stop the perpetrators of these scams. Promoters frequently end up facing heavy fines and imprisonment, IRS said, adding that taxpayers “who wittingly or unwittingly get involved with these schemes” are required to repay all taxes due plus interest and penalties. “The Dirty Dozen represents the worst of the worst tax scams,” said IRS Commissioner Douglas Shulman. “Don't fall prey to these tax scams. They may look tempting, but these fraudulent deals end up hurting people who participate in them.”