Follow Karen Linkedin Twitter Facebook
Email Karen Email
Financial
Jul 23, 2018

Tax Evasion Versus Tax Avoidance

Sponsored Content provided by Karen Durda - President, Enrolled Agent, Century Accounting and Tax Services, Inc.

What is the difference between tax evasion and tax avoidance?
 
One is criminal, and one is not.
 
To evade paying taxes people have used abusive schemes, transactions and scams to involve tax benefits not allowed by law. The IRS has even provided a complete list of abusive types of tax schemes in Publication 3995. To further complicate matters, they can be of either the simple or complex variety. Nonetheless, they are all illegal.
 
If it seems to good to be true, it is.
 
Examples of abusive schemes are ones that promise to reduce your debt or eliminate your taxes via tax credits and/or deductions using a fraudulent return preparer, fake charities, excessive business deductions or reduced business income to receive credits based on income or an illegal tax shelter.
 
And while double checks for e-filed returns stop claiming children for the benefit of receiving earned income tax or children under 17 credits, they get made on mailed-in returns.
 
Since 2002, the IRS established a division within the Small Business/Self-Employed Division called the Lead Development Center to assist in the investigation and conviction process of tax evaders.
 
The IRS has a list it publishes every year of the top tax evasion schemes.
 
Some of these are:

  • We can show you how you’ll never pay taxes again
  • Live in your home and deduct 100 percent of expenses on your tax return
  • Deduct the cost of your child’s education (not to be confused with the Tuition and Fees or American Opportunity Act Credit for higher education)
  • Your Tax Professional does not know of these
  • I can get you big refunds, guaranteed for a fee
  • Share or Borrow Earned Income Tax Credit Dependents
  • Put your money in a trust and never pay taxes again
  • I don’t pay taxes, why should you?
Just remember, when you get caught, not if, you are held for all taxes, penalties and fees, plus criminal action the IRS can take against you.
 
If the person preparing your return states that the return must be mailed in, be suspicious. If they do not sign the return or have self-prepared at the signature line, be suspicious. If their fees are based on the amount of refund they get for you, be suspicious.
 
If you feel you have been involuntarily involved in deceptive tax abuse, file form 14242 or call the IRS at (800) 823-0433.

Karen S. Durda, EA, President of Century Accounting and Tax Services, Inc., has been in the profession since 1984. As an Enrolled Agent credentialed by the Treasury Department, she has the rights as afforded by Congress to represent individuals and businesses before tax authorities. Since May 2012, she has also had the distinction of being a Dave Ramsey Endorsed Local Provider, assisting in budgeting and financial peace for a four-county area and parts of Myrtle Beach.As a Qualified Business expert with the New Hanover County courts, she has experience and knowledge of various scopes of professions and industries, such as medical, health services, legal, construction, retail, real estate, auto sales and service, insurance and restaurant. Continuous tax law courses throughout the year keep her up-to-date on all tax rules, regulations and law changes, as well as business trends, to better serve her clients.

Century logo final 11918114327
Ico insights

INSIGHTS

SPONSORS' CONTENT
Img 1576c1

Is Passive Investing Wise?

Eddie Nowell - South Atlantic Capital Management Group
Leath 683x10242

Effort is Attractive: Get the Talent

Lisa Leath - Leath HR Group
Headshot 1016184145

Opportunity Zones Create Opportunity for Tax Savings

Ryan Skuce - Earney & Company, LLP

Trending News

Public Private Partnership Would Add Student Housing At UNCW

Cece Nunn - Nov 19, 2018

Health Care Heroes Award Winners Announced

Staff Reports - Nov 19, 2018

Airports, Roads Expected To Be Busy With Thanksgiving Travelers

Christina Haley O'Neal - Nov 19, 2018

In The Current Issue

Wilmington Hotel Completes Renovations

The Holiday Inn Express & Suites Wilmington-University Center was redesigned inside and out, over a six-month period....


Tourism Officials Work To Bring Visitors Back

As the region continues to recover from Hurricane Florence, the Wilmington and Beaches CVB recently announced a plan to get the industry bac...


Airlie At Wrightsville Sound Plans Progress

The sale of home sites in a new luxury neighborhood in Wilmington near Wrightsville Beach could be launched as early as the spring of next y...

Book On Business

The 2018 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!


Galleries

Videos

2018 Power Breakfast - Dishing on the Restaurant Biz
2018 WilmingtonBiz Expo - Keynote Lunch with Eric Dinenberg, Rouse Properties
2017 Health Care Heroes