Although there are many legal strategies that can be used to minimize tax obligations, every year many Washington, D.C., residents are accused of using unlawful methods to get out of paying taxes. Whether the Internal Revenue Service claims that a taxpayer made a mistake or took intentional actions to avoid taxes, the consequences can be harsh.
The Internal Revenue Service is the first to admit that it has a major problem on its hands when it comes to fighting tax fraud. This past summer, the acting head of the IRS said as much to members of Congress.
Switzerland has long stood as the icon of banking confidentiality. As we've written about often in recent months, the United States has been particularly aggressive about going after Swiss banks in an effort to uncover unreported (and therefore untaxed) cash held by Americans.
The Internal Revenue Service says tax fraud, tax evasion and tax underpayment costs the federal government about $385 billion a year. With an ocean of red ink that deep it should come as no surprise that federal officials in Washington, D.C., and tax collectors at the state level have begun turning to computer software to turn that red ink to black.
When the federal government goes after an individual for tax crimes the process usually occurs in stages. Each stage represents an instance during which opportunities may exist for mitigating the effects and perhaps reducing the chances of a case coming to full prosecution.
A federal judge in Washington, D.C., is pondering suggestions from the prosecution and the defense regarding sentencing in the cases of former Rep. Jesse Jackson Jr. and his wife, Sandra Jackson.
Groundbreaking technology is amazing stuff (when it works). As with anything that is cutting edge, though, new technology often represents a double-edged sword. With all the apparent benefits come the risks that the tech tools will be used for nefarious purposes. And sometimes the good guys misuse the tools as readily as the bad guys.
It's hardly as anticipated as the Cherry Blossom Festival here in Washington, D.C., but it is no less reliable in its arrival. We're talking about the Internal Revenue Services' annual "Dirty Dozen" list of potential tax scams.
There are a lot of tax-saving strategies that individuals can employ. Some work well. Others need to be examined really carefully before being tried to make sure the individual doesn't wind up proverbially shooting themselves in the foot.
It might seem counterintuitive, but the government doesn't care how you make your money when it comes to taxes. However you earn your income, the Internal Revenue Service wants it reported so that appropriate taxes can be collected. Filing instructions make it clear that income, even from illegal activities, must be recorded and reported.