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Falsely claiming zero wages »Typically a Form 4852 (Substitute Form W-2) or a "corrected" Form 1099 is used as a way to improperly reduce taxable income to zero. Sometimes, scammers even include an explanation on their Form 4852 that cites statutory language on the definition of wages or may include some reference to a paying company that refuses to issue a corrected Form W-2 for fear of IRS retaliation.
Abuse of charitable organizations and deductions » The IRS is investigating intentional abuse of 501(c)(3) organizations and schemes that involve the donation of non-cash assets — including situations in which several organizations claim the full value of the same non-cash contribution. Often these donations are highly overvalued or the organization receiving the donation promises that the donor can repurchase the items later at a price set by the donor.
Disguised corporate ownership »Third parties are improperly used to request employer identification numbers and form corporations that obscure the true ownership of a business. Such scams often are used to underreport income, claim fictitious deductions, avoid filing tax returns and to facilitate money laundering and financial crimes.
Misuse of trusts »Unscrupulous promoters have long urged taxpayers to transfer assets into trusts. Although there are legitimate uses of trusts in tax and estate planning, some highly questionable transactions promise to reduce income tax obligations, increase deductions for personal expenses and reduced estate or gift taxes. Such illegal trusts are used primarily as a means of avoiding income tax liability and hiding assets from creditors, including the IRS.
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