IRS “Dirty Dozen” Always Worth a Looksee
The IRS periodically publishes its “dirty dozen” list of tax scams which folks should be on notice to avoid. The 2011 list just came out, and a few of the dozen do make for amusing reading if nothing else. Such as:
- Hiding Income Offshore – Some folks just think that if their dough isn’t lodged in the good old U.S. of A., the income earned on it is tax free. Au contraire. And in February of this year, the Revenooers announced yet another “voluntary disclosure initiative,” designed to encourage malingerers of this nature to fess up. And get this: you don’t even have to be an English-speaking bloke to take advantage of this wonderful deal. Information on the program is available in Chinese, Farsi, German, Hindi, Korean, Russian, Spanish and Vietnamese!
- Frivolous Arguments – These are always good for a laugh. Ideas like the income tax system is voluntary; wages are not income; Federal Reserve notes are not income; the First Amendment exonerates we and thee from paying taxes, etc. ad nauseam. Talk to the Irwin Schiffs of the world about how far some of these arguments will get you.
- Misuse of Trusts – While many legitimate folk make good use of trusts for a variety of income and estate planning reasons, there are promoters out there who promise various forms of reduction of income subject to tax via the use of trusts, deductions for personal expenses and other such shenanigans.
- Abusive Retirement Plans – Beware of folks who promise schemes designed to avoid the limits on contributions to IRAs, transactions which are actually distributions but not reported as such, and the shifting of appreciated assets at less than fair market value into IRAs.
And all of you wealthy California taxpayers had better beware of all the Joe Sixpacks
who seem to think that the solution to all of their problems is to just tax you more!
We hear that a recent survey published by the Public Policy Institute of California says
that two thirds of likely California voters oppose raising personal income taxes to maintain current funding for schools, and almost as many oppose higher sales taxes to pay for schools, and instead favor raising income taxes on top earners to fund education.
Which leads us to yet another shining example of the consequences of constantly reverting to higher taxes to solve every problem – we hear that Amazon has essentially told South Carolina voters to “shove it” after losing a fight with the state legislature regarding a sales tax exemption it was seeking in connection with the planned opening of a distribution center in the state which would have created over 1,200 jobs.
McClatchy.com reports that company officials immediately halted plans to equip and staff the one million square foot building which was already under construction. “As a result of today’s unfortunate House vote, we’ve canceled $52 million in procurement contracts and removed all South Carolina fulfillment center job postings from our (web) site,” quoth Paul Misener, Amazon vice president for global public policy.
CONSULT YOUR TAX ADVISOR – This article contains general information about various tax matters. You should consult your CPA regarding the implications to your own particular situation.
Jeff Quinn, the author of this article, is a shareholder in Ashley Quinn, CPAs and Consultants, Ltd., with offices in Incline Village and Reno. He can be contacted at 775-831-7288, welcomes comments below, at firstname.lastname@example.org, and invites readers to review his other commentaries at www.taxlawtips.com.