OR WAIT null SECS
Basic rules to be aware of and some specific tax plans that require extreme caution and due diligence.
Tax savings plans of varying legality are marketed heavily to doctors and other high-income earners on a bi-annual cycle: every spring before Tax Day and every fall before the end of the calendar year. We take a two-part look at the basic rules to be aware of and some specific tax plans that require extreme caution and due diligence, relying heavily on guidance from the I.R.S.
As important as tax avoidance planning is to every physician’s wealth preservation plan, it’s important that the plan you chose is legally compliant to avoid legal jeopardy and expenses for tax evasion that are often a multiple of what simply paying the taxes would have been in the first place. In some cases, the taxpayer is simply conned into buying they shouldn’t by the “promoter” of the plan. In other cases, it may be a case of affinity fraud where you are sold a plan based on a personal relationship or because the promoter has sold the same planning to those you know. Either way, just as with Ponzi schemes, people often buy bad planning for two core reasons, because they are promised numbers that are too good to be true and because they are being told what they want to hear, even if they should know better. The IRS is aggressively pursuing actions against both the promoters of these schemes and the taxpayers who participate in them.
In the next installment, we’ll look at some specific plans to avoid.