- Days left
Sharon Kukhan is known for selling a tax "decoder" scheme to help taxpayers avoid paying federal income taxes. She claimed she could "decode" the taxpayers' tax records to show that they were not required to pay income. Her system was based on the lie that clients did not have to pay income taxes unless they lived in a U.S. territory, and that residents of the United States could only be taxed with an excise tax on an excise-taxable business. The cost for this misinformation? $1,750 to $3,195.

The scheme had several names, including IMF Decoder, Paralegal Research Advocates, and Advocates for Justice, Liberty and Freedom. Kukhan's now defunct website IRScodebusters.com reportedly used to claim: "IRSCodebusters is a team of researchers including a federal lawyer (not an attorney) and a certified paralegal. This team specializes in utilizing the Freedom of Information Act and Privacy Act to provide a detailed decoding and examination of the Individual Master File and other secretly coded files the IRS keeps on you."

But the scam will run no more. A federal court has permanently barred Kukhan from selling her program, and the IRS estimates her work cost them about $4.9 million from taxpayers who failed to file returns or pay taxes.

If you participated in this scam, you can look forward to the IRS contacting you. Kukhan was required to turn over a list of her clients, and you can bet the government will be sending out audit notices. My advice? Find a competent tax lawyer and go to the IRS before they find you. Many times, they are more lenient with taxpayers who voluntarily report problems with their tax returns and work with the IRS to pay any taxes owed.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

Increase your money and finance knowledge from home

Introduction to Preferred Shares

Learn the difference between preferred and common shares.

View Course »

Banking Services 101

Understand your bank's services, and how to get the most from them

View Course »

TurboTax Articles

Employer Sponsored Health Coverage Explained

The Affordable Care Act, also known as Obamacare, is simpler than some people may give it credit for. The basic rule to remember is that everyone must carry Minimum Essential Coverage (MEC) or pay a penalty. Employers with 50 full-time employees or more are obligated to sponsor plans for their workers to help them meet this requirement.

How to Report RSUs or Stock Grants on Your Tax Return

Restricted stock units (RSUs) and stock grants are often used by companies to reward their employees with an investment in the company rather than with cash. As the name implies, RSUs have rules as to when they can be sold. Stock grants often carry restrictions as well. How your stock grant is delivered to you, and whether or not it is vested, are the key factors when determining tax treatment.

What is a Schedule Q Form?

The Internal Revenue Service (IRS) has two very different forms that go by the name Schedule Q. One of them is for people who participate in certain real estate investments; this is known as a Form 1066 Schedule Q. The other Schedule Q deals with employer benefit plans. It?s not something an individual taxpayer would normally have to deal with, though a small business owner might need it.

Incentive Stock Options

Some employers use Incentive Stock Options (ISOs) as a way to attract and retain employees. While ISOs can offer a valuable opportunity to participate in your company's growth and profits, there are tax implications you should be aware of. We'll help you understand ISOs and fill you in on important timetables that affect your tax liability, so you can optimize the value of your ISOs.

Add a Comment

*0 / 3000 Character Maximum