Scamming The Rich?

​Every year, the IRS releases a “Dirty Dozen” list of scams for people to watch for. Often, these are of the type with which we are all are familiar – scammers trying to get personal information that they can use to their benefit or bogus claims of outstanding bills that one must pay immediately to avoid serious punishment. Although these are not absent in the current world, I do think it is worth noting that they did not dominate this year’s list and the agency included a series of four items that are aimed toward high-income taxpayers, not the group we often envision as scam victims.

The overall theme of this group of scams is hiding assets, so of course this is only something that affects those high-net worth individuals. If the only money you receive is a paycheck that goes into your only bank account and then most of it is spent on household expenses, well, it is not difficult for the IRS to track that and see nothing shady is going on. It may then seem unfair that those who are more well-off have more options on how to handle their money when it comes to taxes, but that is simply the lay of the land.

And of course, there are legal ways to handle one’s assets in a way that lowers tax obligations. Utilizing these to the best of one’s ability is therefore a sound move. One can argue about the fairness of the system, but one should not be penalized for legally using that system to their full advantage.

In its press release, the IRS address these topics as ones being used by disreputable advisers selling their clients on higher savings through illegal means. I will not argue that some people do fall victim to such tactics and I can certainly appreciate how paying someone a percentage of a significant savings they promise seems like a good move. The fact that simply not filing a tax return is also on this list, though, speaks to how some people are actively looking to just not pay taxes.

It is much easier to understand someone not comprehending the minutiae of tax law and being misled into incorrectly using it than it is to appreciate someone making hundreds of thousands of dollars and then takes a roll of the dice to see if they can get away with not filing taxes (which also seems to tip off they know they have not paid as much as they’re supposed to).

I am not here to offer any solutions as to how to solve the disparity between these two situations but I did want to point it out in an ongoing battle to just say that the best way to handle any tax situation is the best way legally possible. 

Warmly,

Josh Bousquet
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