IRS & Tax Fraud

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Federal Whistleblower Lawyers Blog - IRS and Tax Fraud

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A common form of fraud is intentionally misleading the Internal Revenue Service (IRS), which is known as tax fraud. A business or individual may deceive or fail to disclose information to the IRS in order to avoid paying taxes that are lawfully due. At the Whistleblower Law Firm, we represent clients with information about businesses or individuals who have engaged in this type of illegal conduct. Our whistleblower lawyers have more than 200 years of combined experience in tax fraud cases nationwide.

Wrongdoing Against the IRS

When a business or individual knowingly misleads the IRS, it commits tax fraud. This occurs when a taxpayer conceals assets, understates income, engages in illegal activity, commits identity theft, or otherwise misleads the IRS to avoid paying taxes or to obtain fraudulent refunds.

While IRS auditors are sometimes able to identify tax fraud, many incidents go undetected. The IRS has created incentives to encourage disclosure from individuals who are aware of significant incidents of tax fraud. The Tax Relief and Health Care Act of 2006 is a federal statute that expanded the rights of individuals who provide the IRS with information about tax law violations. Under the Act, the IRS can give financial awards to those who provide credible and substantiated information on tax fraud. It also protects the identity of whistleblowers unless an investigation or examination requires disclosure of the informant’s identity.

Reporting Tax Fraud

To report tax fraud, you must submit Form 211, Application for Award for Original Information, to the IRS. You can also report fraud by using Form 3949-A, Information Referral, if you are not seeking a reward for the information. If you do not submit Form 211, you will not be eligible for a whistleblower reward.

Form 211 requires that you provide the IRS with:

  • Your name, address, and other personal information. Your identity will be kept confidential, but the IRS needs this information to pay you if it recovers any money.
  • Specific details about the business or individual that committed tax or IRS fraud, including the alleged tax law violation and documentation to substantiate the claim.
  • An explanation of how you obtained this information and a description of your relationship to the alleged defrauder.

You should provide as much information about the fraud as possible. If you fail to provide information that is known or available to you, it could affect the amount of your reward. You can include information that is available to the public, but the IRS can lower your reward to 10 percent of the recovered amount for reports of fraud based on this type of information.

Once you submit the claim, the IRS Whistleblower Office will review, examine, and collect data based on the information you provided. The process can be lengthy, depending on the complexity of the issues involved and whether the alleged defrauder decides to litigate the issues. A complete and thorough submission may help shorten the process.

The IRS offers a monetary reward to informants who report tax law violations that exceed $2 million in total back taxes, penalties, interest, and other additions. If the alleged defrauder is an individual, his or her income must be more than $200,000 for the year in which the violation occurred. If you report credible information about tax fraud to the IRS, you may receive between 15-30 percent of the amount recovered by the government. If you do not meet the $2 million or $200,000 threshold, you may receive an award of 15 percent of the recovered amount up to $10 million, at the discretion of the IRS.

Qui Tam Lawyers Dedicated to Holding Companies Accountable Throughout the U.S.

The qui tam attorneys at the Whistleblower Law Firm can help you expose tax or IRS fraud anywhere in the nation. We have helped whistleblowers shed light on corporate and individual tax violations, tax evasion, and other forms of illegal conduct. We can examine your materials and work with you to present a thorough and detailed claim to the IRS. We represent whistleblowers throughout the U.S., including in Philadelphia, Illinois, and Virginia. Call us today at (800) 982-1904, or contact us online to schedule a confidential consultation.