Some American taxpayers may find it unfair to see others evading taxes or committing tax fraud. Based on this, the Internal Revenue Service (IRS) invites whistleblowers to join one of the programs to report tax fraud in exchange for compensation. You can also object anonymously. If you live in the US, read this article to report someone to the IRS.
Step
Method 1 of 2: Reporting Anonymously
Step 1. Make sure that you can support the claim
The IRS states that the most successful reporting is done by a former employee, former spouse or former business partner. Comments without evidence about the purchase of expensive cars or expensive equipment are not sufficient to support claims.
You are not encouraged to report tax fraud that may involve you, as you may be prosecuted for your involvement
Step 2. Remember that the higher the rate of tax evasion, the more likely it is to be investigated by the IRS
If your contractors receive payments in cash, they are much less likely to be reported than businesses that pay less or evade millions of dollars in taxes. The IRS will spend more time and money working on major cases.
Step 3. Go to the irs website
gov.
Look for "Form 3949-A", which contains reference information. Print the form and read the instructions page carefully.
Step 4. Fill in the form with personal information about the person or business you are reporting, as completely as possible
List the areas of the tax fraud area you suspect. Describe as much as you know in the "Comments" column on page one.
Step 5. Leave the "Section C, Information About Yourself" section blank if you wish to report anonymously
Your personal information will not be reported to that person or business; However, you are not protected against lawsuits from the reported person or business if they find out in other ways.
Step 6. Consider attaching another letter that explains a lot about the tax fraud
Remember that all evidence must be collected by legal means. You shouldn't break the law just to prove tax fraud.
Step 7. Submit the form along with additional evidence to the Internal Revenue Service, Stop 31313, Fresno, CA 93888
Method 2 of 2: Reporting For Rewards
Step 1. Understand the rules of the two IRS reporting programs
People who successfully report tax fraud with a value of under two million dollars are entitled to receive up to 15 percent of the value of taxes, interest and penalties paid. Individuals who report tax evasion of more than two million dollars are entitled to receive up to 30 percent of the value of taxes, interest and penalties paid.
- Tax fraud litigation usually takes between one and seven years.
- There is no guarantee that your case will be tried.
- You can be sued if you are involved in a tax fraud scheme.
- You will only receive a reward if the money is successfully repaid. If the government doesn't charge you, you won't receive a reward even if the IRS succeeds in prosecuting the person or business.
Step 2. Visit the irs
gov and search for "Form 3949-A", which contains reference information. Print it out and read the instructions carefully.
Step 3. Return to the IRS website
Look for "Form 211", which contains information about rewards for whistleblowers. In order for your report to be submitted under the whistleblower program, you must complete this form.
Step 4. Fill out "Form 3949-A"
You must include your personal information in "Section C".
Step 5. Consider attaching an additional letter explaining the fraud or as evidence of reporting
The more info you can provide, the more likely you are to receive a prize.
Step 6. Submit both signed forms to the Internal Revenue Service, Whistleblower Office- ICE, 1973 N
Rulon White Blvd., M/S 4110, Ogden, UT 84404.
Step 7. Wait for the IRS to contact you within seven years
If you win a reporting prize, it must also be reported on your income tax and subject to tax.
Tips
- If you are called to testify as a whistleblower, you are advised to seek the help of a lawyer who specializes in whistleblower cases. These attorneys can help you draft letters and defend you in personal lawsuits. If your tax fraud report wins, the IRS may refund the money you spent on this.
- If you wish to report fraudulent activity by a tax preparer, use "Form 14157 instead of "Form 3949-A". You are not eligible for a whistleblower reward.
- If you wish to report potential fraud by a nonprofit or similar organization, use "Form 1909".
