Tax Evasion Awareness and Warnings for Practitioners

CATEGORY: Taxation

COURSE ID: CLVICE, VERSION 2.00

(40)

Online & Mobile

3 CPE Credits

Level: Basic

In this course we will explore the differences between tax evasion and tax avoidance, learning that tax evasion is not always blatant. Preparer and taxpayer penalties will be detailed, how tax evasion hurts the USA and its citizens (US tax gap), and how much the USA spends to combat tax evasion. Third party reporting is explained, where employers, banks, and other institutions report to the IRS income earned by taxpayers. We will also discuss tips to help identify tax evasion. Excerpts from IRS Circular 230 are included. Lastly, best practices are shared for how preparers and taxpayers can avoid being investigated for tax evasion.

3 Credits

$69.00

Online & Mobile

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Tax Evasion Versus Tax Avoidance
1. Introduction
Tax Evasion Isn't Always Blatant or Purposely Committed
1. Cash Earnings
2. Business and Commuting Mileage
3. Charitable Donations Given to GoFundMe Campaigns
4. Subcontractor Pay of Less Than 00
5. Return of Goods Purchased Online
6. Ignorance of the Law is Not an Excuse
7. Underqualified and Incompetent Tax Preparers
Blatant, More Complicated Incidences of Income Tax Evasion
1. Depositing Revenues into Foreign Bank Accounts
2. Falsifying Shipping Records to Customers
3. Titling Assets in States that do not Assess a Personal Property Tax
4. Moving Income Producing Activities to States without State Income Tax
5. Embezzlement from a Company Where You Are an Owner
6. The 2023 and 2024 Dirty Dozen Lists
Financial Crimes That Are Not Tax Evasion
1. Financial Crimes That Are Surprisingly Not Considered to Be Tax Evasion, but Often Accompany Tax Evasion
U.S. Treasury Department Circular 230, Tax Evasion, and Tax Preparer Obligations
1. Section 10.21 Knowledge of client's omission
2. Section 10.51 Incompetence and disreputable conduct
3. Section 10.52 Violations subject to sanction
4. Section 10.79 Effect of disbarment, suspension, or censure
The Impact of Tax Evasion and Related Costs
1. The Tax Gap
2. Increased Quantity of Audits and Tax Complexity's Effect on Tax Compliance
3. Funds Spent on Tax Compliance Monitoring and Its Effect on Tax Compliance
4. IRS Whistleblower Program
5. IRS Office of Fraud Enforcement
Third Party Income Reporting (Forms W-2, 1098, 1099, and Schedule K-1)
1. Third Party Income Reporting Helps Reduce Underreporting of Income (And Purposeful Tax Evasion) By Taxpayers
Tips to Help Identify Tax Evasion
1. Introduction
2. Signs That Your Client Is Committing Tax Evasion
3. Terminating a Client Relationship
Tax Preparer Penalties Related to Gross Misstatements of Tax and Tax Evasion
1. Understatement of Taxpayer's Federal Tax Liability
2. Failure to Furnish Copy of the Income Tax Return
3. Failure by Tax Preparer to Sign a Prepared Income Tax Return
4. Failure to Furnish Preparer Tax Identification Number
5. Failure to Retain Copies or List of Tax Returns Prepared
6. Failure to File Accurate Information Returns to the IRS
7. Negotiation or Endorsement of Taxpayer's Refund Check
8. Failure to Practice Diligence
9. Promoting Abusive Tax Shelters
10. Disclosure or Use of Information
11. Preparing Fraudulent Returns, Statements, or Other Documents
12. Fraudulent Tax Return Preparation for One Client Puts All of your Clients At Risk for an IRS Audit
Taxpayer Accuracy-Related Penalties
1. Introduction
2. The Penalty for Negligence or Disregard of the Rules or Regulations
3. The Penalty for Substantial Understatement of Income Tax
Investigating and Prosecuting Tax Crimes
1. Introduction
2. IRS Audits
3. What Types of Income Tax Returns Are Most Often Audited by the IRS
Best Practices for Tax Preparers Related to Tax Evasion
1. Introduction
2. IRS Audit Techniques Guides
3. Case Study #1
4. Case Study #2
5. Case Study #3
6. Case Study #4

Tax Evasion Awareness and Warnings for Practitioners

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