How to Attract Attention From the IRS con't...

Brag About Beating the IRS

Never brag how you stuck it to the IRS! Bragging at lunch or at the water cooler can result in the most severe audit you have ever had. IRS informers earn good money by turning you in. They receive a reward of as much as 10% of any additional tax collected because of the tip. That could amount to a lot more that 30 pieces of silver.

The form they use is a Form 211. On the lighter side, if you are aware of a tax cheat, you can report it on the IRS Hotline at 800-829-0433.

Indulge in Risky Claims

There will always be some guy with the inside information on how to insulate your income from tax. It’s safe to say that all of these claims have been rejected more often than the old excuse that the dog ate my homework. Be assured that in tax court you will be hit with a penalty of as much as $25,000 for using most of the claims!

The reason many of these promoters are still on the street is the IRS has limited resources. But it looks like the IRS is now trying to eliminate the biggest promoters of these scams. Even CPAs can lead you astray. Check out every idea you hear about on the Internet and elsewhere to see what is being said about it. It is unlikely that a risky scheme that will float with the IRS, even the one your brother-in-law swears by!

Entertain Family Trust Schemes

Who hasn’t seen one of these claims that if you put your income into a trust, that income is not taxed, or the tax goes to the beneficiaries of the trust?  Another claim is that if you put your personal assets into a 'business trust' they become business assets and you can benefit from business deductions. The bad news is that it’s not going to work! The IRS shuts these down a fast as someone thinks them up.

Play Around With Business Bxpenses

A lot of schemes claim you can convert a personal expense into a business expenses that the IRS will allow, just by calling it business expenses. Does this really make any sense at all?  If you're 'in business' you can take a business deduction. To be in business you have to have a "profit objective" that you can substantiate, and meet certain other criteria. This is not rocket science and playing around can attract unwanted attention.

Home Based Business Deductions