Difference between revisions of "Turn Someone in to the IRS"
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#*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.<Ref>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. | #*Avoid breaking the law.<Ref>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 name="rf1">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. | ||
#*'''Form 14157.''' Use this form to report an abusive tax scheme or fraud perpetrated by a tax return preparer or tax preparation company. Also use this form (and Form 14157-A) if you think the preparer altered your form without your consent. | #*'''Form 14157.''' Use this form to report an abusive tax scheme or fraud perpetrated by a tax return preparer or tax preparation company. Also use this form (and Form 14157-A) if you think the preparer altered your form without your consent. | ||
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#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 name="rf2">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.<Ref>https://www.irs.gov/pub/irs-pdf/p5251.pdf</ref> | #*Supporting evidence can include contracts, emails, bank records, ledger sheets, receipts, and books or records.<Ref>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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#*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>https://www.irs.gov/pub/irs-pdf/p5251.pdf</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> | + | #*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 name="rf4">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.<Ref>http://www.investopedia.com/articles/taxes/09/reporting-tax-cheats.asp</ref> | *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>http://www.investopedia.com/articles/taxes/09/reporting-tax-cheats.asp</ref> | ||
