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Lewes, Delaware
Jim's Towing Service
February 17, 2006     Cape Gazette
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February 17, 2006

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50 - CAPE GAZETTE Friday, Feb. 17 - Monday, Feb. 20, 2006 IRS Tax Ti00s Dirty Dozen tax scams lead to rampant theft The Internal Revenue Service (IRS) recently issued the 2006 Dirty Dozen - its latest annual tally of some of the most notori- ous tax scams - along with an alert to taxpayers this filing season to watch out for schemes that prom- ise to reduce or eliminate taxes. Two new schemes have worked their way onto the list in 2006.. In recent months, IRS personnel have noted the emergence of the two scams - zero wages and Form 843 tax abatement - in which til- ers use IRS forms to claim that their tax bills have been wrongly inflated. Also high on the list in 2006 is phishing, a favorite ploy of identi- ty thieves. Over the past few years, the IRS has observed crim- inals working through the inter- net, posing even as representa- tives of the IRS itself, with the goal of tricking unsuspecting tax- payers into revealing private information that can be used to steal from their financial accounts. Several of the usual suspects from last year remain on the list. The IRS, for example, continues to see schemes designed to exploit charitable organizations. Some taxpayers, meanwhile, still use frivolous arguments to claim they do not owe taxes, despite the fact such reasoning has been thrown out of court time and again. "When it Comes to taxes, every- one has to pay their fair share," said IRS Commissioner Mark W. Everson. "I urge taxpayers not to be taken in by hucksters who promise to lower or eliminate taxes. Getting caught up in the Dirty Dozen or similar schemes can lead to big headaches." Namely, involvement with tax schemes can lead to imprisonment and fines. The IRS pursues and shuts down promoters of these and numerous other scams. Anyone pulled into these schemes can also face repayment of taxes- plus interest and penalties. The IRS urges people to avoid these common schemes: 1. Zero Wages - In this scare, new to the Dirty Dozen, a taxpay- er attaches to his or her return either a Form 4852 (Substitute Form W-2) or a corrected Form 1099 that shows zero or little wages or other income. The tax- payer may include a statement indicating the taxpayer is rebut- ting information submitted to the IRS by the payer. An explanation on the Form 4852 may cite "statutory language behind IRC 3401 and 3121" or may include some reference to the paying company refusing to issue a corrected Form W-2 for fear of IRS retaliation. The Form 4852 or 1099 is usually attached to a Zero Return. (See number four below.) 2. Form 843 Tax Abatement This seam, also new to the Dirty Dozen, rests on faulty interpreta- tion of the Internal Revenue code. It involves the filer requesting abatement of previously assessed tax using Form 843. Many using this scam have not previously filed tax returns and the tax they are trying to have abated has been assessed by the IRS through the Substitute for Return Program. The filer uses the Form 843 to list reasons for the request. Often, one of the reasons is: "Failed to properly compute and/or calculate IRC Sec 83-- Property Transferred in Connection with Performance of Service." 3. PMshing - Phishing is a tech- nique used by identity thieves to acquire personal financial data to gain access to the financial accounts of unsuspecting con- sumers, run up charges on their credit cards or apply for new loans in their names. These internet- based criminals pose as represen- tatives of a financial institution and send out fictitious email cor- respondence in an attempt to trick consumers into disclosing private information. Sometimes scammers pose as the IRS itself. In recent months, some taxpayers have received emails that appear to come from the IRS. A typical email notifies a taxpayer of an outstanding refund and urges the taxpayer to click on a hyperlink and visit an official- looking website. The website then solicits a Social Security and credit card number. In a variation of this scheme, criminals have used email to announce to unsus- pecting taxpayers they are under audit and could make things right by divulging selected private financial information. Continued on page 55 For more information call the PSA 24-Hour Real Estate HotLIne (1-800-220-5200 ). Call 1-888-GILPIN for a fast, free, automated mortgage pre-quaUflcationl Cindy TJ Baker Redefer 945-7600 x12 945-7600 xll Allan Brian Schmidt Koyanagi 945-7600 945-7600 x22 745-1103 ANGOLA BY THE BAY-NEW CONSTRUCTION! This contemporary salt box offers 3br, 2 bath, first floor master bedroom w/walk-in-closet, open floor plan w/great room & vaulted ceilings. 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