IRS Dirty Dozen Tax Scams

John Merchant, CPA, CFE

Each year the Internal Revenue Service announces its “dirty dozen” tax scams, representing twelve of the most prevalent and bothersome fraudulent scams and schemes perpetrated by taxpayers, paid preparers and others.

The IRS recently announced its Dirty Dozen for 2009 and it included hiding income offshore, filing false claims for refunds, taking frivolous positions on tax returns to lower tax liability and misuse of trusts.  One of the schemes that has made the Dirty Dozen several times is the Zero Wages Scheme.

Under this scheme, taxpayers submit allegedly “corrected” wage statements indicating that W-2 forms issued by employers were issued in error.  These “corrected” W-2 forms, which are generally totally fraudulent, indicate that the taxpayer actually had no taxable wages for the year.

Other Dirty Dozen schemes involve abuse of retirement plans.  In these cases, taxpayers attempt to hide taxable distributions from retirement plans or conceal the fact that they have over-contributed to IRA accounts.

The IRS warns that each of these schemes is fraudulent and may subject the perpetrator to significant penalties and even criminal prosecution.   To view the full list of this year’s Dirty Dozen, visit

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