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Old 01-31-2012, 03:15 PM
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What are the circumstances that would lead the IRS to consider a taxpayer's behaviour to indicate fraud?

According to the IRS, "the following types of taxpayer behavior are badges of fraud” as shown below;
  1. an understatement of income due to omissions of specific items.
  2. an understatement of income due to failure to report substantial amounts of income received.
  3. fictitious or improper deductions.
  4. accounting irregularities.
  5. false statements.
  6. concealment of assets.
  7. engagement in, or attempts to, conceal illegal activities.
  8. inadequate records maintenance.
  9. substantial cash transactions.
  10. a failure to cooperate with the examining agent."

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