USA: FRIENDLY IRS

by Cathy Odgers

2008-04

The friendly Inland Revenue Service (IRS) recently released “2008 Dirty Dozen” - the top 12 of the latest “scams” and fiddles of Uncle Sam’s “legalized theft for life” regime for USA Persons.

http://www.irs.gov/newsroom/article/0,,id=180075,00.html

Now far from us to be skeptics when it comes to the common part of common sense, it appears that the maxim “a fool and his money are soon parted” is true as “Granddad Sam” seeks to protect people from their own stupidity and greed. “Phishing” and “Economic Stimulus Payments” involve the obtaining of personal information in the name of the IRS including credit card, bank account numbers. By now there shouldn’t be a person in the world who doesn’t know that banks and government authorities never ask for such information over the phone or internet.

In any tax system of rampant over-taxation there must be credits to politically cushion the pain. Some of the IRS stated scams include the push towards the invisible panacea of “Green” (itself a scam of epic proportions) has seen “Fuel Tax Credit Scams” where individuals are claiming tax credits for non-taxable uses of fuel. Little surprise when oil is over USD100 a barrel. Some taxpayers are abusing the “Claim for Refund and Request for Abatement.” Many of these individuals have not previously filed tax returns. As predictable, “Abuse of Charitable Organizations and Deductions” will always occur in a system that gives a deduction for donations to a “charity” and not the greatest charity of all that is the USA Government. 

Many claim that the elderly are abused so little wonder that they are now fighting back with “Abusive Retirement Plans” fiddling asset valuations. The more creatively titled “Frivolous Arguments” header covers taxpayers wishing to make up even more creative tax positions such as objections to military spending. 

Some don’t go to much effort. The “zero wages” scam argues the statutory definition of wages and “return preparer fraud” relies on scammers asking for a percentage of the refund or inflated fees for preparation. The preparer is profiting on stupidity here as there is only one result they are going to give you if they are taking a cut of the refund and it’s a LARGE refund. 

Of more concern to the offshore industry is the misrepresented “Hiding Income Offshore”, “Disguised Corporate Ownership” and “Misuse of Trusts”. 

While we accept that there are promoters who genuinely belong in the http://www.quatloos.com “Cyber-Museum of Scams & Frauds”, legitimate tax and trust planning under the close guidance of qualified, reputable and educated advisors is allowed within the boundaries of the law. 

Even under Uncle Sam’s watch.