Understanding Tax Evasion and Whistleblower Reporting
Tax evasion, the deliberate underpayment or nonpayment of taxes, is a serious offense that can trigger IRS investigations and penalties. If you suspect someone is evading taxes, you can report them to the IRS through their whistleblower program.
IRS Whistleblower Program
The IRS Whistleblower Office encourages individuals to report tax fraud and evasion. Whistleblowers can receive monetary awards if their information leads to successful enforcement actions.
Who is Eligible to Report?
Any individual, except those prohibited by law (e.g., IRS employees), can file a whistleblower claim.
What Information to Report
To file a claim, you must provide specific and credible information about the alleged tax noncompliance, including:
- Description of the alleged noncompliance
- Supporting evidence (e.g., documents, records, emails)
- How and when you obtained the information
- Your relationship (if any) to the subject of the claim
How to Report
Submit your claim using IRS Form 211 and mail it to:
Internal Revenue Service
Whistleblower Office – ICE
1973 N Rulon White Blvd.
M/S 4110
Ogden, UT 84404
What Happens After You Report
- Evaluation: The IRS reviews your claim to determine its credibility and potential impact.
- Investigation: If warranted, the IRS may initiate an investigation into the alleged noncompliance.
- Award Determination: If the IRS takes action based on your information, you may be eligible for an award of 15-30% of the proceeds collected.
Penalties for Tax Evasion
If the IRS determines you have committed tax evasion, you may face severe penalties, including:
- Fines up to $100,000
- Imprisonment for up to five years
- Penalties and interest on unpaid taxes
Protecting Yourself from Retaliation
The Taxpayer First Act of 2019 protects whistleblowers from retaliation by employers or other parties.
Reporting tax evasion to the IRS can help ensure that individuals and businesses pay their fair share of taxes. The IRS Whistleblower Program provides incentives for individuals to come forward with information about potential noncompliance. However, it’s important to note that tax evasion is a serious offense with significant consequences.
Former IRS Agent Explains How To Turn Someone r Report Them to the IRS and Have IRS Work The Case.
FAQ
What happens when someone reports you to IRS?
What happens after someone is reported for tax evasion?
How long does it take the IRS to investigate you?
Why would you report someone to the IRS?
What happens when you report someone to the IRS?
Let’s see what happens when you report someone to the IRS and how it impacts them. Before contacting the IRS and informing them about a tax law violation, you must be sure that the agency will consider your claim. The IRS Whistleblower office offers financial rewards to individuals who are brave enough to speak up and report tax evasion.
What happens if a taxpayer underreports income?
The IRS may even request information to correct internal calculations. If a taxpayer underreports income, which means the income figure they reported on their tax return is less than their actual income, the IRP sends an alert to the IRS. Then an IRS agent compares the income on your tax return with the information in the IRP.
What happens if I don’t report my income to the IRS?
Your employer will generate a notification of this income to you with a copy to the IRS. An audit can also arise if you sell your shares through a broker. If you fail to report this income in either case or if you do it incorrectly, you may trigger an audit situation. Investing in real estate can allow for a number of legitimate deductions.
Do you owe taxes if you don’t report to the IRS?
(Yes, they all report to the IRS each year, just like taxpayers.) When numbers don’t match up, an alert goes out and the IRS investigates. “Even in the absence of a tax return, the IRS can determine if you owe taxes by the income that was reported to them by others,” Joe Valinho, tax code expert and president of Justice Tax, tells Debt.com.