Tax Guru – Ker$tetter Letter

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Archive for the ‘scams’ Category

Tax scams according to IRS…

Posted by taxguru on February 17, 2012

IRS Releases the Dirty Dozen Tax Scams for 2012

1. Identity Theft

2. Phishing

3. Return Preparer Fraud

4. Hiding Income Offshore

5. “Free Money” from the IRS & Tax Scams Involving Social Security

6. False/Inflated Income and Expenses

7. False Form 1099 Refund Claims

8. Frivolous Arguments –  listed here

9. Falsely Claiming Zero Wages

10. Abuse of Charitable Organizations and Deductions

11. Disguised Corporate Ownership

12. Misuse of Trusts

 

  

Posted in IRS, scams | 1 Comment »

Clients who fall for tax scams…

Posted by taxguru on September 27, 2011

Anyone who has been in this business for any length of time has had to decide how to handle clients who fall for illegal tax evasion scams.  If they won’t listen to our advice and steer clear of the scams, we have no choice but to cease working with those clients because our acceptance of their involvement in the scams could very easily blow back on us as their tax preparers.  It’s happened to us on several occasions.

This article from Forbes has an interesting look at a case where a CPA may have stuck with his misguided clients for too long and even helped the IRS make a strong criminal case against them.

Can a CPA Bury his Client by Trying to Save Him ?

Thanks to ishade.com for the lead on this.

TaxCoach Software: Are you giving your clients what they really want?

Posted in Clients, scams | Comments Off on Clients who fall for tax scams…

Anything is legal if the government does it…

Posted by taxguru on September 19, 2011

From Blog Comix

Posted in comix, scams, SSA | Comments Off on Anything is legal if the government does it…

Telling it like it is…

Posted by taxguru on September 8, 2011

One good thing about the current group of presidential wannabes is the growing public acknowledgment of the Ponzi Scheme nature of the Social Security system.  The harder next step is actually doing something about it.

Rush had a good discussion about this on today’s show, including the point that, unlike Bernie Madoff’s Ponzi Scheme, which was voluntary to participate in, Social Security is mandatory, with the IRS’s guns at our heads to enforce participation.

From Blog Pix

 

Social Security’s monstrous lie

 

 

Posted in scams, SSA | Comments Off on Telling it like it is…

Posted by taxguru on March 17, 2010

Beware of IRS’ 2010 “Dirty Dozen” Tax Scams – Some good tips on things to watch out for.

Posted in IRS, scams | Comments Off on

Comparing Ponzi Schemes

Posted by taxguru on February 15, 2010

Neal Boortz recently posted this side by side comparison of the two largest Ponzi schemes used to steal investor money in this country.

Another big difference between the two schemes was the fact that Madoff’s victims invested their money voluntarily, while Social Security is funded at the point of a gun. Madoff’s investors stopped giving him their money as soon as it was revealed to be a fraud. IRS is still forcing people to pay in to the SSA even now that’s its collapse has been revealed to be imminent.

Posted in scams, SSA | Comments Off on Comparing Ponzi Schemes

Debunking Tax Protestors

Posted by taxguru on February 5, 2010

Long time readers know that one of my long running pet peeves is having to waste time debunking ridiculous theories espoused by tax protestors.  For a long time, I felt like I was doing the IRS’s job because they refused to even acknowledge publicly that those arguments were floating around under the completely mistaken belief that to even mention them would in some way legitimize them.  The promoters of those arguments used the IRS’s silence as an endorsement of their arguments.  

Finally, after decades of ignoring the idiotic arguments used by tax protestors to convince others that they don’t need to file tax returns, IRS has been taking a more pro-active approach.  They have recently updated their guide to most of these bogus claims, entitled The Truth about Frivolous Tax Arguments.

IRS Press Release – IRS Debunks Frivolous Tax Arguments

83 Page PDF File

The table of contents below gives us a good idea of the growth in this segment of our society, as there have obviously been enough stupid people advocating these ridiculous theories to earn a spot on this list of morons.

THE TRUTH ABOUT FRIVOLOUS TAX ARGUMENTS

January 1, 2010

I. FRIVOLOUS TAX ARGUMENTS IN GENERAL

A. The Voluntary Nature of the Federal Income Tax System

1. Contention: The filing of a tax return is voluntary

2. Contention: Payment of tax is voluntary

3. Contention: Taxpayers can reduce their federal income tax liability by filing a “zero return.”

4. Contention: The IRS must prepare federal tax returns for a person who fails to file.

5. Contention: Compliance with an administrative summons issued by the IRS is voluntary.

B. The Meaning of Income: Taxable Income and Gross Income

1. Contention: Wages, tips, and other compensation received for personal services are not income.

2. Contention: Only foreign-source income is taxable.

3. Contention: Federal Reserve Notes are not income.

C. The Meaning of Certain Terms Used in the Internal Revenue Code

1. Contention: Taxpayer is not a “citizen” of the United States, thus not subject to the federal income tax laws.

2. Contention: The “United States” consists only of the District of Columbia, federal territories, and federal enclaves.

3. Contention: Taxpayer is not a “person” as defined by the Internal Revenue Code, thus is not subject to the federal income tax laws.

4. Contention: The only “employees” subject to federal income tax are employees of the federal government.

D. Constitutional Amendment Claims

1. Contention: Taxpayers can refuse to pay income taxes on religious or moral grounds by invoking the First Amendment.

2. Contention: Federal income taxes constitute a “taking” of property without due process of law, violating the Fifth Amendment.

3. Contention: Taxpayers do not have to file returns or provide financial information because of the protection against self-incrimination found in the Fifth Amendment.

4. Contention: Compelled compliance with the federal income tax laws is a form of servitude in violation of the Thirteenth Amendment.

5. Contention: The Sixteenth Amendment to the United States Constitution was not properly ratified, thus the federal income tax laws are unconstitutional.

6. Contention: The Sixteenth Amendment does not authorize a direct nonapportioned federal income tax on United States citizens.

E. Fictional Legal Bases

1. Contention: The Internal Revenue Service is not an agency of the United States.

2. Contention: Taxpayers are not required to file a federal income tax return, because the instructions and regulations associated with the Form 1040 do not display an OMB control number as required by the Paperwork Reduction Act.38

3. Contention: African Americans can claim a special tax credit as reparations for slavery and other oppressive treatment.

4. Contention: Taxpayers are entitled to a refund of the Social Security taxes paid over their lifetime.

5. Contention: An “untaxing” package or trust provides a way of legally and permanently avoiding the obligation to file federal income tax returns and pay federal income taxes.

6. Contention: A “corporation sole” can be established and used for the purpose of avoiding federal income taxes.

7. Contention: Taxpayers who did not purchase and use fuel for an off-highway business can claim the fuels tax credit.

8. Contention: A Form 1099-OID can be used as a debt payment option or the form or a purported financial instrument may be used to obtain money from the Treasury.

II. FRIVOLOUS ARGUMENTS IN COLLECTION DUE PROCESS CASES.

A. Invalidity of the Assessment.

1. Contention: A tax assessment is invalid because the taxpayer did not get a copy of the Form 23C, the Form 23C was not personally signed by the Secretary of the Treasury, or Form 23C is not a valid record of assessment.

2. Contention: A tax assessment is invalid because the assessment was made from a substitute for return prepared pursuant to section 6020(b), which is not a valid return.


B. Invalidity of the Statutory Notice of Deficiency
.

1. Contention: A statutory notice of deficiency is invalid because it was not signed by the Secretary of the Treasury or by someone with delegated authority.

2. Contention: A statutory notice of deficiency is invalid because the taxpayer did not file an income tax return.

C. Invalidity of Notice of Federal Tax Lien

1. Contention: A notice of federal tax lien is invalid because it is unsigned or not signed by the Secretary of the Treasury, or because it was filed by someone without delegated authority.

2. Contention: The form or content of a notice of federal tax lien is controlled by or subject to a state or local law, and a notice of federal tax lien that does not comply in form or content with a state or local law is invalid.

D. Invalidity of Collection Due Process Notice

1. Contention: A collection due process notice (Letter 1058, LT-11 or Letter 3172) is invalid because it is not signed by the Secretary or his delegate.

2. Contention: A collection due process notice is invalid because no certificate of assessment is attached.

E. Verification Given as Required by I.R.C. § 6330(c)(1)

1. Contention: Verification requires the production of certain documents.

F. Invalidity of Statutory Notice and Demand

1. Contention: No notice and demand, as required by I.R.C. § 6303, was ever received by taxpayer.

2. Contention: A notice and demand is invalid because it is not signed, it is not on the correct form (such as Form 17), or because no certificate of assessment is attached.

G. Tax Court Authority

1. Contention: The Tax Court does not have the authority to decide legal issues.

H. Challenges to the Authority of IRS Employees.

1. Contention: Revenue Officers are not authorized to seize property in satisfaction of unpaid taxes.

2. Contention: IRS employees lack credentials. For example, they have no pocket commission or the wrong color identification badge.

I. Use of Unauthorized Representatives.

1. Contention: Taxpayers are entitled to be represented at hearings, such as collection due process hearings, and in court, by persons without valid powers of attorney.

J. No Authorization Under I.R.C. § 7401 to Bring Action.

1. Contention: The Secretary has not authorized an action for the collection of taxes and penalties or the Attorney General has not directed an action be commenced for the collection of taxes and penalties.

III. PENALTIES FOR PURSUING FRIVOLOUS TAX ARGUMENTS

 

Posted in IRS, Morons, scams | Comments Off on Debunking Tax Protestors

Urban legend still floating around…

Posted by taxguru on January 5, 2010

I have addressed this hoax previously, but it is still being passed around the net, as in this email I recently received from a client in the PRC.

Subject: Senate Bill 2099

Kerry
Senate bill 2099 will require us to put on our 1040 federal tax form all firearms that we have or own. Do you know anything about this?

My Reply:

That’s a hoax that’s been floating around the net for about a year now. The 2009 forms are in place and they don’t have anything for reporting firearms.

Snopes.com has a good explanation of it.

In case you haven’t seen a copy of the actual 2009 1040, here is a blank one you can look at. You’ll see that there is absolutely nothing about firearms.

Kerry

Follow-Up:

Thank you for the info.



Posted in scams, TaxForms | Comments Off on Urban legend still floating around…

Posted by taxguru on October 23, 2009

Costly fraud and error reported in home buyers’ tax program

Wow!  Who would have suspected that a refundable $8,000 tax credit would be an invitation for un-deserving people to cheat?  Of course, the answer is that our imbecile rulers in DC obviously weren’t able to anticipate what anybody with half a brain could see would be an inevitable result of such a program. Common Sense has to be the scarcest commodity in all of DC.

And the response from our rulers to this?  The sub-head of this article sums it up:

Lawmakers consider extension.

Typical problem solving by our moronic leaders.  When a government program is filled with fraud and corruption, just make the program even bigger and more costly and available for more people to scam. 

Is anyone else in favor of a constitutional amendment to change the eligibility requirements for our elected officials to include an IQ above 50?  That would wipe out most of the current ruling class right off the bat.

 

Posted in Credits, scams | Comments Off on

New IRS Phone Scam

Posted by taxguru on October 8, 2009

It appears that our friends at the real IRS have even more competition in separating people from their money from imposters.

Earlier this morning, a client called and said that there was a voice mail message on her husband’s cell phone, claiming to be from the IRS and that they needed to call back by the end of business today.  I didn’t recognize the 800 number given as being one of the regular ones that IRS uses.

Instead of calling that number back, we decided that it would be best for her to call the main IRS info line at 1–800–829–1040 and ask them to pull up her account. 

She just called us back and said that when she called the main IRS switchboard, they had no pending actions against them or anything else that would have warranted any contact from an IRS agent.  They also told her that they didn’t even have any of their cell phone numbers in their database.

So, this was obviously another scam from some scumbag looking to trick people into revealing their personal identification, credit card and bank info, much like the email version that I mentioned last month

 

Posted in IRS, scams | Comments Off on New IRS Phone Scam