Tr?id=566623520170033&ev=PageView&noscript=1

IRS Highlights Tax Scams Targeting High-Net-Worth Individuals

Posted on June 25th, 2024 at 10:18 AM
IRS Highlights Tax Scams Targeting High-Net-Worth Individuals

From the desk of Jim Eccleston at Eccleston Law

The Internal Revenue Service (IRS) has concluded its annual Dirty Dozen campaign, spotlighting the most egregious tax scams. According to WealthManagement.com, this year's focus includes schemes aimed at high-net-worth individuals (HNWI).

Fake Charities
The IRS warns that deceitful organizations often exploit wealthy individuals' generosity, especially during natural disasters or tragic events. These fake charities mimic legitimate ones, using similar names, emails, or fake caller IDs to solicit donations and personal information. The IRS emphasizes that only donations to legitimate tax-exempt organizations qualify for tax deductions. Individuals should verify a charity's legitimacy using the IRS Tax-Exempt Organization Search (TEOS) tool to avoid falling victim.

Illegal Tax Schemes and Improper Deductions
The IRS also cautions against tax schemes promoted by shady practitioners. Theseschemes often promise unrealistic tax reductions through aggressive strategies, such as inflated art donation deductions or abusive use of charitable remainder annuity trusts. For example, some promoters encourage purchasing art at a discounted price, promising significant tax deductions for inflated appraised values upon donation. The IRS has art appraisers to determine true valuations and warns against promoters suggesting annual art donations with guaranteed deductions.

Additionally, the IRS highlights the misuse of trusts to eliminate capital gains and schemes that defer gain recognition on property sales. Such practices can expose taxpayers to severe civil or criminal penalties.

Unscrupulous Practitioners
Finally, WealthManagement.com reports on the IRS advice related to unscrupulous practitioners. Specifically, the IRS warns HNWIs to steer clear of practitioners promoting fraudulent offshore schemes or fake tax strategies. One notable scam involves "ghost preparers" who do not sign the tax returns they prepare. These preparers often charge high fees or steal refunds and then disappear, leaving taxpayers to face the repercussions.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, irs

Return to Archive

TESTIMONIALS

Previous
Next
Quotes Bigger

As a financial advisor with over 20 years of experience, I feel fortunate to call Jim my attorney and friend. He is a fantastic lawyer and trusted advisor. He is skilled in the matters necessary to do the job well. He uses his thoughtful approach and calm demeanor to achieve a positive outcome for the client. If you want to feel confident that nothing will be missed and that you will be represented in a highly professional manner, call Jim Eccleston.

Bill C. and Dan M.

LATEST NEWS AND ARTICLES

1781712614 Law
June 17, 2026
As Wealth Management Consolidation Accelerates, Some Advisors Reevaluate the Meaning of Independence

According to AdvisorHub, the independent wealth management industry has entered a new phase of evolution, prompting some advisors to question whether the firms that once championed independence now increasingly resemble the traditional institutions many advisors left behind.

1781638769 Law
June 16, 2026
Cetera Hit With Class Action Lawsuit Over Cash Sweep Program

A proposed class action lawsuit has accused Cetera Financial Group and Cetera Investment Services of improperly profiting from customer cash held in the firms' FlexInsured Account Program, according to a report by ThinkAdvisor.

1781539717 Law
June 15, 2026
New York Insurance Agent Pleads Guilty to $50 Million Ponzi Scheme

A New York insurance agent and tax preparer has pleaded guilty to operating a Ponzi scheme that allegedly defrauded nearly 1,000 investors out of more than $50 million over several decades, according to a report by InvestmentNews.