IRS Warns Consumers to Avoid Tax Scams

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IRS Warns Consumers to Avoid Tax Scams

WASHINGTON - Deducting the entire amount of your wages and calling it "a necessary expense for the production of income" is one of the new tax scams the government has seen this year.

Taxpayers should steer clear of this and other tax scams, the Internal Revenue Service (news - web sites) said Monday. The agency warned consumers that they might face fines and even prison time for participating in fraud or tax evasion.

"Don't be fooled by these outrageous claims," said IRS Commissioner Mark Everson. "There is no secret way to escape paying taxes."

A new scheme detected this year is the "claim of right" doctrine, a misinterpretation of tax law that sees taxpayers trying to deduct the entire amount of their wages.

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IRS Warns Consumers to Avoid Tax Scams