IRS 2013 List of “Dirty Dozen” Tax Deceptions

May 3, 2013 — The IRS Whistleblower Office, put in place by the Tax Relief and Health Care Act of 2006, gives whistleblowers with knowledge of tax fraud a way to notify the government and collect a reward. Under the Act, government informants are entitled to anywhere from 15 to 30 percent of the amount collected by the government as a result of a tipster’s information. To be eligible for a reward involving a corporation’s failure to pay taxes, there is no minimum recovery required. But to receive a reward for notifying the IRS about the tax liabilities of an individual, the person’s gross income must be more than $200,000 for every taxable year in question and the recovery must exceed $2 million.

IRS Watches for Sizable Tax Scams

The Internal Revenue Service has announced the 2013 annual list of the “Dirty Dozen” fraudulent tax scams. Some of the scams involve crimes against individual taxpayers, such as refund fraud and identity theft. Other scams contrive to cheat the IRS — and thus, American taxpayers as a whole. The Dirty Dozen tax scams announce by the IRS for 2013 include:

1. Identity Theft
2. Phishing
3. Return Preparer Fraud
4. “Free Money” from the IRS & Tax Scams Involving Social Security
5. Impersonation of Charitable Organizations
6. False Form 1099 Refund Claims
7. Frivolous Arguments
8. Falsely Claiming Zero Wages
9. Hiding Income Offshore
10. False/Inflated Income and Expenses
11. Disguised Corporate Ownership, and
12. Misuse of Trusts

Some of the Dirty Dozen tax scams are used to escape paying millions of dollars in taxes. For example, it is a federal crime to hide assets in offshore banks or brokerage accounts. Though taxpayers who wish to come clean and disclose formerly hidden foreign assets may do so voluntarily. Indeed, since 2009, the IRS has taken in $5.5 billion from taxpayers participating in offshore voluntary disclosure programs.

Another popular scam for escaping taxes on a grand scale involves disguised corporate ownership. Some taxpayers create corporations with phony employer identification numbers, which corporations are used for money laundering and financial crimes and to underreport income.

Company Insiders Notify the IRS of Tax Fraud

When a company engages in tax fraud, its accounting department employees will likely want no part of it. Before contacting the IRS with information about a company’s tax scam, tipsters need to know their rights and learn how the process works. The IRS whistleblower attorneys with Waters & Kraus provide informants with the knowledgeable legal representation they need. Send us an email or call our whistleblower lawyers at 855.784.0268 to discuss how we can safeguard and advance your interests while fighting tax fraud.