Form 14242 (Rev 7-2024) Report Suspected Abusive Tax Promotions or Preparers-2025

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Promoters make statements relating to a tax benefit or a gross valuation overstatement that they know or should know are false or fraudulent. They often promise to eliminate or substantially reduce your tax liability.
A reporting corporation must file Form 8806 to report an acquisition of control or a substantial change in the capital structure of a domestic corporation. The reporting corporation or any shareholder is required to recognize gain (if any) under section 367(a) and the related regulations as a result of the transaction.
There are four general types of tax preparers: certified public accountants, enrolled agents, tax attorneys, and non-credentialed preparers.
Promoting abusive tax shelters Provides a gross valuation overstatement: Penalty is $1,000 or 100% (whichever is less) of the gross income the person made for the activity for each entity or arrangement (treated as a separate activity) and participation in each sale.
Abusive tax schemes allow individuals or businesses to avoid paying taxes, but come with major penalties and lead to an even greater tax gap. Insiders of such schemes may be eligible for a reward if their information leads to a successful action of a scheme of $2 million or more.
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People also ask

Use Form 14157 to file a complaint against a tax return preparer or tax preparation business. Tax professionals can use this form to report events that impact their PTIN or business.
Tax shelters are legal strategies that help you reduce your income taxes owed. You can benefit from tax shelters by claiming deductions like student loan interest or charitable donations, which lower your taxable income.
A tax attorney can provide legal tax advice, draw up necessary legal documents, prepare and file tax returns, represent you in disputes with tax authorities, negotiate with the IRS on your behalf, and more.