Difference between revisions of "Turn Someone in to the IRS"
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Some American taxpayers find themselves in the uncomfortable position of witnessing another person’s tax evasion and fraud. The Internal Revenue Service welcomes whistleblowers. You can choose to report anonymously, or you can provide your name. The IRS also has a program that allows you to report tax fraud for a financial reward. | Some American taxpayers find themselves in the uncomfortable position of witnessing another person’s tax evasion and fraud. The Internal Revenue Service welcomes whistleblowers. You can choose to report anonymously, or you can provide your name. The IRS also has a program that allows you to report tax fraud for a financial reward. | ||
| − | [[Category:Taxes and Fees]] | + | [[Category: Taxes and Fees]] |
==Steps== | ==Steps== | ||
===Reporting Suspected Tax Fraud=== | ===Reporting Suspected Tax Fraud=== | ||
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#*Write down your own memories or observations. You are a witness to any fraud. Try to be as detailed as possible. | #*Write down your own memories or observations. You are a witness to any fraud. Try to be as detailed as possible. | ||
#*Collect the names of witnesses. Other people might have first-hand knowledge of the fraud, and you can give the IRS their names and contact information. | #*Collect the names of witnesses. Other people might have first-hand knowledge of the fraud, and you can give the IRS their names and contact information. | ||
| − | #*Avoid breaking the law.< | + | #*Avoid breaking the law.<ref name="rf1">http://www.investopedia.com/articles/taxes/09/reporting-tax-cheats.asp</ref> For example, you shouldn’t open someone’s mail, log onto their computer, or steal files. If you don’t have documents in your possession, you can tell the IRS where they can find them. |
#Identify the correct form to use. You will report suspected fraud to the IRS by filling out a form. You can download these forms from the IRS website or order by calling 1-800-829-0433. You need to use the right form, which will depend on the violation you are reporting:<ref>https://www.irs.gov/individuals/how-do-you-report-suspected-tax-fraud-activity</ref> | #Identify the correct form to use. You will report suspected fraud to the IRS by filling out a form. You can download these forms from the IRS website or order by calling 1-800-829-0433. You need to use the right form, which will depend on the violation you are reporting:<ref>https://www.irs.gov/individuals/how-do-you-report-suspected-tax-fraud-activity</ref> | ||
#*'''Form 3949-A.''' Use this form to report a business or individual of violating the tax laws. Common examples include failure to pay, kickbacks, false deductions or exemptions, not reporting income, and altering or falsifying tax documents. | #*'''Form 3949-A.''' Use this form to report a business or individual of violating the tax laws. Common examples include failure to pay, kickbacks, false deductions or exemptions, not reporting income, and altering or falsifying tax documents. | ||
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#*'''Form 13909.''' Submit this form if you suspect wrongdoing by an exempt organization or employee plan. | #*'''Form 13909.''' Submit this form if you suspect wrongdoing by an exempt organization or employee plan. | ||
#Read the instructions. You should also download or request the instructions for any form you fill out. Read the instructions thoroughly and refer back to them as you fill out your referral form. | #Read the instructions. You should also download or request the instructions for any form you fill out. Read the instructions thoroughly and refer back to them as you fill out your referral form. | ||
| − | #Complete the form. Each form will request different information. You should complete each form as completely as possible. For example, Form 3949-A will ask for the following:< | + | #Complete the form. Each form will request different information. You should complete each form as completely as possible. For example, Form 3949-A will ask for the following:<ref name="rf2">https://www.irs.gov/pub/irs-pdf/f3949a.pdf</ref> |
#*identifying information about the taxpayer you are reporting | #*identifying information about the taxpayer you are reporting | ||
#*contact information for the taxpayer you are reporting | #*contact information for the taxpayer you are reporting | ||
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#*whether you consider the taxpayer dangerous | #*whether you consider the taxpayer dangerous | ||
#*information about yourself (optional) | #*information about yourself (optional) | ||
| − | #Choose whether to report anonymously. You have the option of not telling the IRS your name when you report fraudulent activity. However, if you do disclose your name, then the IRS will keep your name confidential.< | + | #Choose whether to report anonymously. You have the option of not telling the IRS your name when you report fraudulent activity. However, if you do disclose your name, then the IRS will keep your name confidential.<ref name="rf1" /> |
#*If you don’t give your name, then you can’t testify against the person should they be prosecuted. For that reason, you might want to give your name. | #*If you don’t give your name, then you can’t testify against the person should they be prosecuted. For that reason, you might want to give your name. | ||
#Submit the form. The form should tell you where to submit it. Generally, you can mail the form to the IRS. Alternately, you might fax the form. Remember to make a copy of your completed form for your records. | #Submit the form. The form should tell you where to submit it. Generally, you can mail the form to the IRS. Alternately, you might fax the form. Remember to make a copy of your completed form for your records. | ||
#*Include copies of all supporting evidence as well. | #*Include copies of all supporting evidence as well. | ||
| − | #*The IRS does not provide updates on the status of any investigation.<ref | + | #*The IRS does not provide updates on the status of any investigation.<ref name="rf1" /> However, you may be contacted if the IRS needs additional information. Provide it promptly. |
===Reporting Fraud for a Monetary Reward=== | ===Reporting Fraud for a Monetary Reward=== | ||
#Check if you qualify for an award. Sometimes, the IRS rewards whistleblowers where their information results in the collection of substantial taxes, penalties, and interest. For example, you might qualify for an award in one of the following situations:<ref>https://www.irs.gov/uac/whistleblower-informant-award</ref> | #Check if you qualify for an award. Sometimes, the IRS rewards whistleblowers where their information results in the collection of substantial taxes, penalties, and interest. For example, you might qualify for an award in one of the following situations:<ref>https://www.irs.gov/uac/whistleblower-informant-award</ref> | ||
#*If the amount in dispute exceeds $2 million, and a few other conditions are satisfied, then you may get 15-30% of the amount the IRS collects. Furthermore, if the case involves an individual, their income must exceed $200,000. | #*If the amount in dispute exceeds $2 million, and a few other conditions are satisfied, then you may get 15-30% of the amount the IRS collects. Furthermore, if the case involves an individual, their income must exceed $200,000. | ||
#*The IRS also has discretion to give awards in other cases. The maximum amount of the award is 15% of the amount collected, up to $10 million. | #*The IRS also has discretion to give awards in other cases. The maximum amount of the award is 15% of the amount collected, up to $10 million. | ||
| − | #Confirm your information is solid. The IRS won’t rely on your speculation that someone has broken the law. Instead, it wants solid leads.<ref | + | #Confirm your information is solid. The IRS won’t rely on your speculation that someone has broken the law. Instead, it wants solid leads.<ref name="rf2" /> Analyze what documented information you have that someone is a tax cheat. |
| − | #*Supporting evidence can include contracts, emails, bank records, ledger sheets, receipts, and books or records.< | + | #*Supporting evidence can include contracts, emails, bank records, ledger sheets, receipts, and books or records.<ref name="rf4">https://www.irs.gov/pub/irs-pdf/p5251.pdf</ref> |
| − | #*You don’t need to have supporting evidence in your possession. However, you should describe them and identify their location with as much detail as possible.<ref>https://www.irs.gov/uac/how-do-you-file-a-whistleblower-award-claim-under-section-7623-a-or-b</ref> | + | #*You don’t need to have supporting evidence in your possession. However, you should describe them and identify their location with as much detail as possible.<ref name="rf3">https://www.irs.gov/uac/how-do-you-file-a-whistleblower-award-claim-under-section-7623-a-or-b</ref> |
#Complete Form 211. You must submit this form if you want to claim an award. You can download it from the IRS website here: https://www.irs.gov/pub/irs-pdf/f211.pdf. Provide the following information: | #Complete Form 211. You must submit this form if you want to claim an award. You can download it from the IRS website here: https://www.irs.gov/pub/irs-pdf/f211.pdf. Provide the following information: | ||
#*name of the taxpayer you are reporting, including any aliases | #*name of the taxpayer you are reporting, including any aliases | ||
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#*your identifying information | #*your identifying information | ||
#*your signature under penalty of perjury | #*your signature under penalty of perjury | ||
| − | #Submit the form. Make a copy for your records and submit the form along with all supporting evidence to the IRS. Don’t withhold information or evidence, since doing so could be held against you. If you have a question about what to submit, call the Whistleblower’s office.< | + | #Submit the form. Make a copy for your records and submit the form along with all supporting evidence to the IRS. Don’t withhold information or evidence, since doing so could be held against you. If you have a question about what to submit, call the Whistleblower’s office.<ref name="rf1" /> |
#*Mail to: Internal Revenue Service, Whistleblower Office—ICE, 1973 N. Rulon White Blvd., M/S 4110, Ogden, UT 84404. | #*Mail to: Internal Revenue Service, Whistleblower Office—ICE, 1973 N. Rulon White Blvd., M/S 4110, Ogden, UT 84404. | ||
| − | #Await the IRS decision. Your information will be sent to a subject matter expert, who might contact you to ask questions. If the IRS doesn’t use the information, you’ll be sent a denial letter.< | + | #Await the IRS decision. Your information will be sent to a subject matter expert, who might contact you to ask questions. If the IRS doesn’t use the information, you’ll be sent a denial letter.<ref name="rf4" /> |
#*A claim with merit gets forwarded to an investigator. Generally, it can take five to seven years to complete an investigation. | #*A claim with merit gets forwarded to an investigator. Generally, it can take five to seven years to complete an investigation. | ||
#*Because it can take so long to decide, you should make sure the IRS has your current contact information. If you move, send your new contact information as soon as possible to Internal Revenue Service, Initial Claims Evaluation Team, 1973 N. Rulon White Blvd., M/S 4110, Ogden, UT 84404. | #*Because it can take so long to decide, you should make sure the IRS has your current contact information. If you move, send your new contact information as soon as possible to Internal Revenue Service, Initial Claims Evaluation Team, 1973 N. Rulon White Blvd., M/S 4110, Ogden, UT 84404. | ||
| − | #Appeal to the Tax Court. In some situations, you can appeal to the tax court if the IRS turns down your claim for a reward. In order to appeal, the amount in dispute must have exceeded $2 million.<ref | + | #Appeal to the Tax Court. In some situations, you can appeal to the tax court if the IRS turns down your claim for a reward. In order to appeal, the amount in dispute must have exceeded $2 million.<ref name="rf2" /> It usually takes three to ten years to go through the court process.<ref name="rf4" /> |
#*Because so much money is at stake, you should hire a tax lawyer to help you make the strongest case that you can. You can find a qualified tax lawyer by contacting your local or state bar association.<ref>https://shop.americanbar.org/ebus/abagroups/divisionforbarservices/barassociationdirectories/statelocalbarassociations.aspx</ref> | #*Because so much money is at stake, you should hire a tax lawyer to help you make the strongest case that you can. You can find a qualified tax lawyer by contacting your local or state bar association.<ref>https://shop.americanbar.org/ebus/abagroups/divisionforbarservices/barassociationdirectories/statelocalbarassociations.aspx</ref> | ||
==Tips== | ==Tips== | ||
| − | *You shouldn’t report suspected fraud to the IRS if you in any way participated in the fraud. The IRS will investigate and probably prosecute you as well.< | + | *You shouldn’t report suspected fraud to the IRS if you in any way participated in the fraud. The IRS will investigate and probably prosecute you as well.<ref name="rf1" /> |
==Sources and Citations== | ==Sources and Citations== | ||
{{reflist}} | {{reflist}} | ||
{{WikiHow}} | {{WikiHow}} | ||
