Offshore Tax Cheating on IRS “Dirty Dozen” List of Tax Scams
The IRS recently finalized its annual list of twelve tax scams that taxpayers may encounter during the 2017 tax season. The list generally consists of two types of scams – one involving attempts by third parties to cheat taxpayers, and the other involving attempts by taxpayers to cheat the IRS.
The Dirty Dozen Tax Scams
The full list is as follows:
- Phishing (fake emails or websites looking to steal personal information)
- Phone Scams
- Identity Theft
- Return Preparer Fraud
- Fake Charities
- Inflated Refund Claims
- Excessive Claims for Business Credits
- Falsely Padding Deductions on Returns
- Falsifying Income to Claim Credits
- Abusive Tax Shelters
- Frivolous Tax Arguments
- Offshore Tax Avoidance
A description of the tax scams is available on the IRS website: https://www.irs.gov/uac/newsroom/irs-summarizes-dirty-dozen-list-of-tax-scams-for-2017
Offshore Tax Avoidance
Of particular relevant to U.S. expats is the last tax scam on the “dirty dozen” list – offshore tax avoidance. This scam has made the list for several years and continues to be a top priority for the IRS.
Interestingly, on the IRS page dedicated to the offshore tax avoidance scheme, the IRS puts most of its effort into describing the amnesty programs available for taxpayers who want to come into compliance with the IRS. It also hails the success of the programs, stating that, “Since the first Offshore Voluntary Disclosure Program (OVDP) opened in 2009, there have been more than 55,800 disclosures, and the IRS has collected more than $9.9 billion from this initiative alone. In addition, another 48,000 taxpayers have made use of separate streamlined procedures to correct prior non-willful omissions and meet their federal tax obligations, paying approximately $450 million in taxes, interest and penalties.”
We believe that this reflects the softer outreach approach currently being taken by the IRS, which favors taxpayer disclosure over aggressive auditing and penalization. For delinquent expat taxpayers, now more than ever is a good time to participate in an IRS tax amnesty program, including the OVDP and Streamlined programs.
How We Can Help
If you are a taxpayer living abroad and are behind on your U.S. taxes, a number of options are currently available to you, including and in addition to the IRS amnesty programs. Each option has its advantages and disadvantages, and choosing the best way forward requires a careful analysis of your particular facts and circumstances. Our experts at Expat Tax Professionals are available to help discuss your options and guide you through each step of the disclosure process.
We have years of experience helping delinquent taxpayers come into IRS compliance. We can help you determine which program is best for your particular case, so that you can put past delinquencies behind you for good.
By Ephraim Moss, Esq. & Joshua Ashman, CPA