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Beware the dirty dozen tax scams of 2015

Taxes » Tax Law » Beware The Dirty Dozen Tax Scams Of 2015

Abusive tax structures
Abusive tax structures © lenetstan/Shutterstock.com

Abusive tax structures

This is a generally inclusive category for good reason. These types of tax schemes encompass multiple flow-through entities.

Basically, says the IRS, the tax avoidance involves various business arrangements -- limited liability companies, limited liability partnerships and international business companies are among the most common -- that utilize foreign financial accounts, offshore credit and debit cards and other similar instruments. With these tools, the perpetrators take advantage of multilayer financial transactions to hide the real ownership of the taxable income or assets.

Such schemes are helped by the financial secrecy laws of some foreign jurisdictions and the availability of credit and debit cards issued from offshore financial institutions.

Trusts also can fall into this category. Trusts can be valuable legal arrangements to deal with many complex family, financial and tax issues. However, trusts designed solely to hide assets from the IRS are illegal.

Trusts can be complicated, so don't take the word of a stranger offering to set up one that will reduce your tax bill. Find an attorney or other trained tax professional who can help you establish a proper, legal trust.

And note, the IRS Criminal Investigation unit targets not only the criminals who set up these elaborate schemes, but also the individuals who knowingly participate in abusive tax schemes.

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