In what has become an annual rite of passage, the IRS has issued its list of the “dirty dozen tax scams” for 2011. The list is shuffled a bit, but it hasn’t changed much in recent years. Here’s what you should be avoiding.
1. Hiding income offshore. Some 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. Taxes may also be evaded by using offshore debit cards, credit cards, wire transfers, foreign trusts, employee-leasing schemes, private annuities or insurance plans. Taxpayers who voluntarily disclose foreign holdings reduce their risk of criminal prosecution.
2. Identity theft and phishing. Unsuspecting victims may be tricked into revealing personal or financial information online via emails, tweets, or phony web sites. If you receive suspicious email messages allegedly coming from the IRS, don’t open any attachments or click ...(register to read more)