Daily Tax Update - February 07, 2006

IRS ANNOUNCES "DIRTY DOZEN" TAX SCAMS FOR 2006:
Today, the IRS released its annual list of the most "notorious" tax scams. The IRS stated that two new tax schemes appear on the list for 2006 including "zero wages" and "Form 843 tax abatement"–– schemes in which filers use IRS forms to claim that their tax bills have been wrongly inflated. Two tax scams were not on the list this year due to court cases against a number of the promoters in "claim of right" and "corporation sole" schemes.

  • IRS Commissioner Mark Everson said, "When it comes to taxes, everyone has to pay their fair share. 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."

The "Dirty Dozen" list follows:

  1. Zero Wages
  2. Form 843 Tax Abatement
  3. Phishing 
  4. Zero Return 
  5. Trust Misuse 
  6. Frivolous Arguments 
  7. Return Preparer Fraud 
  8. Credit Counseling Agencies 
  9. Abuse of Charitable Organizations and Deductions 
  10. Offshore Transactions 
  11. Employment Tax Evasion
  12. "No Gain" Deduction
Additional information can be accessed here.   

INTERNAL REVENUE SERVICE - CIRCULAR 230 DISCLOSURE:
As provided for in Treasury regulations, advice (if any) relating to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any plan or arrangement addressed herein.

STEPTOE & JOHNSON LLP - TAX PRACTICE
Steptoe & Johnson LLP has one of the largest and most diverse law firm tax practices in the country. The practice covers the entire spectrum of federal taxation, including representation of businesses before the Congress, Treasury and the national office of the IRS; transactional planning for domestic and multinational corporations; complex audit and controversy work for corporations and other business interests contesting IRS adjustments; litigation before the Tax Court, Court of Federal Claims, district courts, courts of appeals and the Supreme Court. The firm's tax practice also encompasses all aspects of employee benefits (ERISA), executive compensation, tax-exempt organizations and charitable giving.  Steptoe has an extensive state and local tax practice, representing an array of business clients on complex sales and use tax, corporate income tax and property tax matters, both advising those clients and handling audits, administrative appeals, and litigation for them.  Read  more information on Steptoe's tax practice