The latest IRS alert affects high-income filers. There is one new threat for these taxpayers and they should be informed about it to avoid any trouble. The Internal Revenue Service confirms that charitable contribution scams are increasing rapidly.
Therefore, it is of vital importance to make any of these contributions following the IRS rules and Federal laws. Actually, the first thing high-income filers should know is that fact that scammers are promoting fraudulent schemes across the United States.
IRS warning to high-income filers
Avoid promoters of fraudulent tax schemes that involve “donations of ownership interest in closely held businesses.” For your information, they are often marketed as “Charitable LLCs.”
Do not forget that these types of promotions are aimed at high-income filers. Besides, the IRS regards them as abusive transactions. Some taxpayers forget that they are always responsible for the information they report on their tax returns.
Hence, all the information provided must be accurate. Avoid any issues that these scammers are trying to make you believe are possible and legal. No doubt, there can be serious consequences.
IRS unveils the consequences of these schemes
American taxpayers with a high income should take into consideration that if they take part in an abusive scheme in order to reduce their tax liability, there could be penalties.
The Internal Revenue Service states that:
- it can result in the assessment of the correct tax owed
- interest
- penalties
- fines
- imprisonment
What is more, charities need to be extremely cautious. Of course, they should also avoid these abusive schemes. Do not trust promoters who sometimes tempt taxpayers to participate in a scheme that involves false charitable deductions.
Obviously, “taxpayers can properly deduct donations of closely held business interests” reminds the IRS. But creating limited liability companies (LLCs) is the scheme many scammers follow. They even sometimes have control over the charity that receives the donation. Watch out, because abusive transactions will be investigated.