Businesses need to take appropriate steps to minimize their exposure to whistleblower or other claims by employees and other service providers that report the potential involvement of the business in tax scams or other improper tax transactions.Businesses face whistleblower, tax fraud prosecution, additional tax and penalty liability and other sanctions for involvement in tax shelters or other tax schemes. The Internal Revenue Service (IRS) 2009 “dirty dozen” list of tax scams released today (April13, 2009) warns businesses about getting involved in 12 tax transactions that the IRS views as likely to create tax fraud and whistleblower risks. The IRS is urging U.S. businesses and other taxpayers to avoid participation in these common schemes. Businesses should review lists of IRS abusive transactions, should evaluate whether any of their transactions may be subject to scrutiny by the IRS, and take other appropriate steps to mitigate their exposure to prosecution for tax fraud, to tax related whistleblower liability and other risks.
