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5 Tax Scams: Do They Work?

By Neal Colgrass,  Newser Staff

Posted Mar 20, 2009 6:34 PM CDT
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(Newser) – Cheating the IRS is illegal and dumb. That said, Details asked attorney Kelly Phillips Erb—who keeps a blog that welcomes cheaters—to evaluate a few of the more popular scams. "I find their logic interesting," Erb says.

  • Hide Your Gambling Winnings: Doable, but a score of $1,200 at the slots or $600 at the track requires filling out a W-2G form. If you plan to deduct losses, keep a journal of the event—it will come in handy during an audit.

  • Make Up Dependents: Those who fabricate kids are walking a fine line, Erb warns. Suddenly having 10 dependents raises a red flag, and could trigger Patriot Bill-era charges.
  • Invent Donations to Charity: The IRS cross-references your donations against a list of charities, so forget about it—unless it's a donation to Goodwill for less than $500.
  • The Old "Home Office": Just don't deduct 100% of anything, especially the phone line.
  • Don't Pay At All: Ask Wesley Snipes. "Yeah, a lot of those people end up in jail," says Erb.

Actor Wesley Snipes shakes hands with a bystander as he enters the federal courthouse in Ocala, Fla. Thursday, Jan. 31, 2008.
Actor Wesley Snipes shakes hands with a bystander as he enters the federal courthouse in Ocala, Fla. Thursday, Jan. 31, 2008.   (AP Photo/Phil Sandlin)
Tax attorney Kelly Phillips Erb keeps a blog that welcomes tax cheaters, to let them explain their logic.
Tax attorney Kelly Phillips Erb keeps a blog that welcomes tax cheaters, to let them explain their logic.   (Shutterstock)
Actor Wesley Snipes visits the Wii Music Experience, held at the Island Def Jam Hype House, where guests visited during the Sundance Film Festival in Park City, Utah on Saturday, Jan. 17, 2009.
Actor Wesley Snipes visits the Wii Music Experience, held at the Island Def Jam Hype House, where guests visited during the Sundance Film Festival in Park City, Utah on Saturday, Jan. 17, 2009.   (AP Photo/Nintendo, Sara Jaye Weiss)
Actor Wesley Snipes of Brooklyn's Finest poses for a portrait at the Gibson Guitar Lounge during the Sundance Film Festival in Park City, Utah, on Saturday, Jan. 17, 2009.
Actor Wesley Snipes of "Brooklyn's Finest" poses for a portrait at the Gibson Guitar Lounge during the Sundance Film Festival in Park City, Utah, on Saturday, Jan. 17, 2009.   (AP Photo/Mark Mainz)
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COMMENTS
Showing 3 of 3 comments
BackAgain
Mar 21, 2009 12:28 PM CDT
Just a Dem how to avoid taxes.
JonmarkP
Mar 21, 2009 7:39 AM CDT
Scamming the ultimate scammers, the IRS - I love it. Have no problem paying taxes for the common good. When it goes to war profiteers and billionaires, they can kiss my rosy red ass.
Caps
Mar 21, 2009 5:15 AM CDT
Umlat, I totally agree with you. Tax cheats should be jailed and billed for their time in jail.

Erb's blog, where cheaters are welcome
Taxgirl.com

 
taxes • Internal Revenue Service • cheating

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