Hiding income in offshore accounts, identity theft, return preparer fraud, and filing false or misleading tax forms top the annual list of â€œdirty dozenâ€ tax scams in 2011, the Internal Revenue Service announced today.
â€œThe Dirty Dozen represents the worst of the worst tax scams,â€ IRS Commissioner Doug Shulman said. â€œDonâ€™t fall prey to these tax scams. They may look tempting, but these fraudulent deals end up hurting people who participate in them.â€
The IRS works with the Justice Department to pursue and shut down perpetrators of these and other illegal scams. Promoters frequently end up facing heavy fines and imprisonment. Meanwhile, taxpayers who wittingly or unwittingly get involved with these schemes must repay all taxes due plus interest and penalties.
Following is the Dirty Dozen for 2011:
Hiding Income Offshore
The IRS aggressively pursues taxpayers involved in abusive offshore transactions as well as the promoters, professionals and others who facilitate or enable these schemes. Taxpayers have tried to avoid or evade U.S. income tax by hiding income in offshore banks, brokerage accounts or through the use of nominee entities. Taxpayers also evade taxes by using offshore debit cards, credit cards, wire transfers, foreign trusts, employee-leasing schemes, private annuities or insurance plans. (more…)