Many Orange County taxpayers facing tax fraud accusations did not intentionally defraud the IRS. The most common way that Californians get into tax disputes is by taking the advice of a tax preparer who was either under qualified or intent on filing a false return in order to maximize his or her own profits. The unfortunate impact of this behavior is that the taxpayer is left solely responsible for the misdeeds of a predatory tax preparer.
The IRS issues an annual "Dirty Dozen" list of the most popular tax scams every year. The purpose of the list is to educate taxpayers in Orange County and around the country on what schemes an unscrupulous tax advisor may attempt to promote. In addition to the "Dirty Dozen" list, the IRS has also released a shortened list of five tax scams to avoid. Orange County taxpayers should be aware of this list and be careful to avoid what the IRS considers year-round tax scams.
1. Hiding Income Offshore. The IRS continues to aggressively pursue Orange County residents that it believes are hiding money in offshore accounts. Amnesty deadlines for offshore accounts were recently extended and an experienced tax law attorney can assist taxpayers in filing a complete application under the Offshore Voluntary Disclosure Program.
2. Phishing. This type of tax scam is done mostly through email. Remember that the IRS never initiates any email contact about tax issues. Call the IRS if you have questions about the legitimacy of an email purportedly from an IRS agent.
3. Return Preparer Fraud. As discussed earlier, many tax preparers will try to win clients by promising unrealistically large returns. A Form 3949-A can be filed to report a fraudulent preparer.
4. Filing False or Misleading Forms. These are sometimes filed by a fraudulent preparer, or an Orange County taxpayer acting under bad tax advice.
5. Frivolous Arguments. Remember that any claims made in the context of tax litigation have to be supported by existing tax law. Contact an experienced tax law attorney to avoid presenting arguments that have already discredited in court.
Source: IRS, "Five Tax Scams to Avoid this Summer," IRS Summertime Tax Tip 2011-08, July 22, 2011