Scam-4: Disguised corporate ownership

The IRS says that domestic shell corporations are being formed and operated in certain states in an effort to conceal business ownership or financial activity. This scheme is new to the 2007 dirty dozen, but the IRS says these anonymous entities are being used to facilitate long-standing tax evasion efforts, such as underreporting of income, nonfiling of tax returns, money laundering and other financial crimes. In extreme cases, says the IRS, the shell corporations could be used to hide terrorist financing and the agency says it is working with state authorities to identify abusive entities.

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