The IRS’s annual Dirty Dozen list may sound like a gimmick, but taxpayers should take it seriously. It’s a road map to current IRS audit priorities and a warning to taxpayers and tax professionals to avoid fraudulent and abusive tax schemes or strategies. Use of a strategy on the list can not only result in an audit, but make it impossible to avoid substantial tax penalties.

Planning on leaving the U.S.? If so, you have two choices from a tax perspective, but neither is painless. The tax law that applies to foreign living and expatriation can be tricky, so it’s essential that you depart the country correctly.

If you engage in any interactions with foreign entities or conduct foreign transactions, it is highly probable that you will be required to file tax and other forms. Failure to do so can result in severe penalties. To obtain a comprehensive understanding of the necessary forms, download the Common Foreign Reporting Forms PDF.

Some tax strategies claim to help you avoid all your federal income taxes—no math required—simply by making a few straightforward arguments on your tax return. The problem is, they have no basis in law, and in fact constitute tax fraud. The end result will almost certainly be penalties and even jail time. Protect yourself from these scams by knowing how to tell the difference between fairy-tale tax strategies and the real deal.

The tax law offers several ways to reduce or eliminate U.S. income taxes or foreign-sourced earned income. Picking the correct tax-reduction strategy based on your situation is the key to minimizing your U.S. income tax liability. In this article, you see common scenarios and options that show you how to pay the least amount of U.S. income tax on your foreign-sourced earned income.

Planning on leaving the U.S.? If so, you have two choices from a tax perspective, but neither is painless. The tax law that applies to foreign living and expatriation can be tricky, so it’s essential that you depart the country correctly.

If you report a tax cheat to the IRS, you may receive a portion of any money recovered following an audit. For example, the IRS paid $104 million to a citizen who revealed that his Swiss bank employer was helping clients evade U.S. taxes. If you feel it is your civic duty to report a tax cheat, the IRS would be glad to hear from you and reward you for initiating a successful investigation.

The IRS is pursuing taxpayers with foreign accounts and activities. You are likely aware of the FBAR and Form 8939 filing requirements, but the tax code has many other lesser-known required filings that carry large penalties for non-filing. Get onboard now. Learn the tax code’s requirements and how you might fix noncompliance and avoid huge penalties.

Do you have significant insurance needs? If so, the captive insurance company might save you money on your insurance, create a nice tax shelter, and produce a pile of cash. To achieve this agreeable result, you have to follow the rules and consider the tax code safe harbors.

The IRS does not like offshore and foreign bank accounts that are not reported on the FBAR, IRS Form 8938, and Schedule B of IRS Form 1040. Millions of U.S. taxpayers have perfectly legal and properly reported offshore and foreign bank accounts. But legal or illegal, they must be reported on the two income tax forms and the FBAR.

Panama is now part of the tax-defined North American area where tax deductions are favored by tax law. For entry into this favored tax-deductible area, Panama had to agree to give the IRS and other government agencies banking and other information that otherwise was not available under Panama’s bank secrecy laws.

Terry Gerber was sentenced to two years and six months in federal prison for tax evasion.

Roy Lewis, a dentist from California, was sentences to 2 years in prison for tax evasion. He was involved with Tower Executive Resources, a Denver-based company that set up a failed tax-evasion scheme with false invoices, bogus tax deductions, and secret offshore bank accounts.