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

I just wanted to say thanks again for preparing and executing my case in such a professional manner. It was a pleasure to watch two professionals take such pride in their work, as well as becoming personally in tune with your client (Me). I would personally recommend you and your firm to anyone.

John O.

LATEST NEWS AND ARTICLES

1779464913 Law
May 22, 2026
Blue Owl Caps Redemptions as Investors Seek Billions in Withdrawals from Private Credit Funds

Blue Owl Capital faced a sharp rise in redemption requests during the first quarter as investors attempted to withdraw approximately $5.4 billion from two of the firm's largest private credit funds, according to reporting by the Wall Street Journal.

L
May 21, 2026
Edward Jones Faces Federal Privacy Lawsuits Over Alleged Data Sharing With Tech Companies

Edward Jones is facing multiple lawsuits alleging that the firm improperly shared clients' personal and financial information with third-party technology companies for targeted advertising purposes, according to reporting by Financial Planning.

1779287606 Law
May 20, 2026
FINRA Sanctions Ameriprise for Supervisory Failures in Variable Annuity Exchanges

The Financial Industry Regulatory Authority (FINRA) has fined Ameriprise Financial Services and ordered restitution to resolve allegations that the firm failed to adequately supervise certain variable annuity exchange recommendations.