How To Report Tax Fraud To The Irs


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Promoters Of Abusive Tax Schemes Or Preparers Of Fraudulent Returns

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Common abusive tax scams include anti-tax law, home-based business, trust, and off-shore schemes.

To report promoters of these scheme types or any other types you are aware of that are not listed here, please send a completed referral formPDF, along with any promotional materials to the Lead Development Center:


How Many People Get Turned In To The Irs

The Treasury Inspector General for Tax Administration provided some insight on the number of taxpayers turned into the IRS. The TIGTA report provided information on the number of Forms 3949-A received:

The report also provided data on how many information referrals were audited and the additional assessments from the audits:

The data clearly shows that many informant reports do not result in IRS activity. In fact, the data indicates that only a little more than 6% result in an audit.

However, these leads are very fruitful for IRS auditors. The IRS clearly gets a substantial increase in average assessments from its informant-sourced audits vs. other sources of audits. For its Small Business/Self-employed audits, the IRS gets over a 64% increase in its information report sourced audits .

In addition to audits, the IRS also sends a few of these referrals each year to IRS Criminal Investigation for review. The results of these investigations are not known.

Why Help The Irs

Nobody likes paying more than their fair share of taxes in order to compensate for others who intentionally evade theirs. Why shouldn’t tax evaders give up a portion of their incomes to provide things that benefit the general good, like roads and sewers, when you do? Reporting a tax cheat is like reporting a shoplifteryou’re just asking them to pay for something they’re trying to unfairly get for free.

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What Happens When The Irs Cracks Down On Tax Fraud

The IRS has between 36 years to investigate tax fraud depending on the amount of underpaid tax. According to the CI’s 2018 annual report, it identified $9.69 billion worth of tax fraud, issued 1,399 warrants and had a 91.7 percent conviction rate. Moreover, it initiated 1,714 tax crime investigations and recommended 1,050 prosecutions. On a related note, 1,052 parties received tax crime-related sentences. However, many instances of tax fraud result in civil penalties rather than criminal prosecutions. Data collected in 2018 indicates that the IRS assessed nearly $29.3 billion in civil penalties. Almost $12 billion of that amount originated from individual tax returns or those related to estates and trusts.

File Your Tax Return And Irs Form 14039

IRS Tax Fraud Reporting f3949a

Print your completed Form 14039 Identity Theft Affidavit along with your tax return if you plan to mail it in. The form can also be completed online at the Federal Trade Commission, and the FTC will transfer the form to the IRS.

Keep copies of anything you send to the IRS, especially tax-related documents. You should receive a letter from the IRS confirming receipt.

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How Do You Report Someone For Tax Fraud

Report Tax Fraud Use Form 3949-A, Information Referral PDF if you suspect an individual or a business is not complying with the tax laws. Dont use this form if you want to report a tax preparer or an abusive tax scheme. We will keep your identity confidential when you file a tax fraud report.

How do you contact the IRS about fraud?

  • 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: Form 3949-A.

Reporting Other Information To The Irs

  • Other Languages
  • If you have information about tax noncompliance but are not interested in an award, or you have other information you believe may be of interest to the IRS:

    • For information on how to Report Suspected Tax Fraud Activity, if you have information about an individual or company you suspect is not complying with the tax law, and you do not want to seek an award. You can remain anonymous.
    • The IRS sets professional standards for attorneys, certified public accountants and enrolled agents who represent taxpayers before the IRS. To learn more about those professional standards, or how to report a violation, see Office of Professional Responsibility At-A-Glance and Circular 230PDF Violations.
    • Report Fraud, Waste and Abuse to Treasury Inspector General for Tax Administration , if you want to report, confidentially, misconduct, waste, fraud, or abuse by an IRS employee or a Tax Professional, you can call 1-800-366-4484 . You can remain anonymous.

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    Know The Signs Of Identity Theft

    You may not know youre a victim of identity theft until youre notified by the IRS of a possible issue with your return.

    Be alert to possible tax-related identity theft if:

    • You get a letter from the IRS inquiring about a suspicious tax return that you did not file.
    • You cant e-file your tax return because of a duplicate Social Security number.
    • You get a tax transcript in the mail that you did not request.
    • You get an IRS notice that an online account has been created in your name.
    • You get an IRS notice that your existing online account has been accessed or disabled when you took no action.
    • You get an IRS notice that you owe additional tax or refund offset, or that you have had collection actions taken against you for a year you did not file a tax return.
    • IRS records indicate you received wages or other income from an employer you didnt work for.
    • Youve been assigned an Employer Identification Number but you did not request an EIN.

    The Difference Between Cheating On Your Taxes And Negligently Filing Them And How The Irs Draws The Line

    IRS Warns Of Tax Fraud Schemes On The Rise

    It shouldn’t come as a shock to hear that it’s a crime to cheat on your taxes. Nevertheless, the number of Americans convicted of tax crimes is astonishingly small. And the number of convictions for tax crimes has decreased over the past decade.

    According to the IRS, individual taxpayers do 75% of the cheating — mostly middle-income earners. Corporations do most of the rest. Cash-intensive businesses and service industry workers, from handypeople to doctors, are the worst offenders. For example, the IRS claims that waiters and waitresses underreport their cash tips by an average of 84%.

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    Cooperate With The Irs Investigation

    After you submit your forms and tax return, you will receive an acknowledgment letter. Your case will be assigned to the Identity Theft Victim Assistance organization, which has employees with specialized training to help you. Most cases are reviewed and resolved within 120 days, but some complex cases might take 180 days or more.

    If the IRS is unable to resolve the matter, you can contact the Taxpayer Advocate Service, a division within the IRS, to provide you with tax help. Contact your local Taxpayer Advocate Service office to speak with someone about the kind of tax-related problems you need help with.

    Can I Report State Tax Fraud

    The IRS deals with federal income taxes. If you suspect a person or business of committing tax fraud at the state level, you should contact the states department of revenue or other taxing body to learn how to report the information. States have their own forms and rules for reporting fraud.

    For example, Colorado allows citizens to report suspected tax fraud online or by mail. South Carolina accepts its fraud complaint forms via email or mail. And New York accepts reports of tax evasion and fraud via an online submission form, phone, fax or mail.

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    What Types Of Activity Should I Report To Treasury Oig

    Treasury OIG is responsible for investigating matters related to Treasury employees, programs, contracts, grants, loans, funds, or its bureaus with the exception of the Internal Revenue Service . Matters related to the IRS should be filed with the Treasury Inspector General for Tax Administration . The following types of violations should be reported to our office:

    Why Is It Important To Report Tax Fraud

    Irs Hotline Report Tax Evasion

    Always consider it your obligation to report tax fraud if you’re a responsible citizen. Some of the reasons to report someone for not paying tax include:

    • Reporting tax fraud can be lucrative for the reporter as they may get compensation/reward from the IRD.
    • Tax fraud incapacitates any government’s allocations to critical areas like schools, compensation of elderly citizens, and hospitals, among others.
    • Tax fraud cripples the global economy by lowering the trading abilities of individual nations.

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    The Irs Whistleblower Reward

    The IRS Whistleblower Program guarantees to the whistleblower at least 15%, and up to 30%, of government tax collections that result from the whistleblowers reporting to the IRS, to the extent those recoveries exceed $2 million.

    No reward is paid to the whistleblower until the IRS actually collects the taxes, penalties and interest owed, and all the statutory periods for a taxpayer to file a claim for a refund has expired.

    Whistleblower Interviews With The Irs

    The IRS frequently interviews the whistleblower, often several months after the filing, but it is not required to do that. Depending on the nature of the reported alleged fraud, the whistleblower may be interviewed more than once. The whistleblower may even be asked to participate in an investigation, for example to explain the significance of documents that the IRS has obtained, but this is rare. The IRS has complete discretion as to whether to initiate an audit or investigation, and whether to take any action on the basis of the investigation.

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    Reporting A Tax Underpayment To The Irs

    All that is required is filing a Form 211 with the IRS. On this form, the whistleblower explains the tax underpayment and names the perpetrator. Although many whistleblowers report tax frauds, the Form 211 needs to describe an underpayment, not a fraud. There is no filing fee. A Form 211 is confidential, and the IRS will not disclose the identity of a whistleblower until an award is made.

    Since the goal of the Form 211 is to entice the IRS to take action, it is best to submit underlying documents demonstrating that a tax was underpaid. For example, if the claim is that real estate was undervalued for purposes of estate tax calculation, the whistleblower might include an appraisal and/or other evidence of the correct value, such as documentation of the price of a recent sale of the property. Many whistleblowers will not have access to relevant documents. A former employee aware of a corporate fraud might have detailed knowledge of what occurred, but no documents at all. Submission of documents is not required. The IRS will always have access to tax returns, and it can receive additional documents through an audit or an administrative subpoena.

    What To Include In Your Complaint

    Reporting Fraud to OIG
    • Relevant names, dates, times, locations.

    • If applicable, the name of the contractor or grantee, contract or grant numbers, and award dates.

    • A detailed description of the alleged wrongdoing, the Treasury facility, personnel, and/or program affected.

    • How you became aware of the problem, efforts made thus far to correct the problem, and current status of the problem cited by the alleged wrongdoing.

    • Please DO NOT include hyperlinks when filing complaints as these hyperlinks will not be accessed when evaluating the complaint.

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    What Activities Amount To An Abuse Of Tax

    The IRS regulations prohibit 501 non-profit organizations from some particular activities and require an established level of reporting and public disclosure. Any organization that doesn’t follow these rules risks being placed under sanctions or having its tax-exempt status revoked by the IRS. Some of the activities that can jeopardize a non-profit organization’s tax-exempt status include:

  • Failure to pay taxes on unrelated business income : An organization can lose its exempt status if it makes irregular income from activities unrelated to its exempt purpose and fail to pay taxes. There are times when non-profits make income in ways unrelated to their non-profit purposes. Although non-profits can earn unrelated business income without impacting their non-profit status, they are required to pay corporate taxes on the UBI as per the state and federal corporate tax rules. Usually, the first $1,000 of unrelated income is exempted from tax, with the remainder being taxed. Some organizations take advantage of the complexities in reporting systems to avoid paying taxes on unrelated income.
  • Private benefit/inurement: The law outlaws an insider or a person with a personal or private interest in a non-profit organization from benefiting financially or otherwise from the entity’s activities.
  • Lobbying: Although 501 organizations are allowed to undertake some lobbying, the number of lobbying activities should be regulated to avoid it becoming the main activity of an organization.
  • How Can I Get Someone To Investigate Me At The Irs

    The address for mailing the form is Internal Revenue Service Center, Stop 31313, Fresno, California 93888. Alternatively, you can simplify things by reporting the fraud or evasion to the IRS via phone. All you need to do is call the Criminal Investigation Hotline in your area by dialing 1-800-829-1040.

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    How People Cheat On Their Taxes

    Most people cheat by deliberately underreporting income. A government study found the bulk of the underreporting of income was done by self-employed restaurateurs, clothing store owners, and — you’ll no doubt be shocked — car dealers. Telemarketers and salespeople came in next, followed by doctors, lawyers , accountants , and hairdressers.

    Self-employed taxpayers who over-deduct business-related expenses — such as car expenses — came in a far distant second on the cheaters hit parade. Surprisingly, the IRS has concluded that only 6.8% of deductions are overstated or just plain phony.

    If you are caught cheating by an auditor, he or she can either slap you with civil fines and penalties or, worse, refer your case to the IRS’s criminal investigation division.

    How To Report Someone To The Irs On Your Own


    The IRS provides two ways to process tax fraud by filling in and submitting form 3949-A or writing a letter to the IRS. However, if you don’t want to fill in the form to report someone to the IRS, the letter you send should indicate as much information as possible. Ensure the following details appear in the letter:

  • The name of the person or business entity you’re reporting
  • The person’s Social Security number or the business’ employer identification number
  • Descriptive information about the tax fraud you’re reporting and how you learned about the crime
  • Any unreported income’s estimated cash amount
  • Duration of the suspected tax fraud
  • Your name, address, and telephone number.
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    Respond Immediately To The Irs

    No one wants to be the victim of tax fraud or tax scams, so its important to be aware of signs that your identity has been stolen. Here are some to consider:

    • Multiple tax returns filed using your Social Security number

    • IRS notice that you owe additional taxes

    • IRS notice of a tax refund offset

    • IRS notice of collection actions for a year you did not file taxes

    • IRS notice that you earned income from a company you never worked for

    See: How One Mistake on My Taxes Almost Resulted in Fraud

    If the IRS sends you a letter about a suspicious return for your Social Security number, call the IRS at the number listed in the letter. Dont respond to any emails, texts or phone calls that claim to be from the IRS. Its against the agencys policy to initiate contact with taxpayers by email, text message or social media channels to request personal or financial information. Should the IRS need to contact you, it would do so by mail first.

    Does The Irs Check Your Dependents

    The primary tool the IRS uses to verify dependents on your tax return is Social Security numbers. You must supply the Social Security number for every dependent you claim. The IRS computers compare the legal names and Social Security numbers of your dependents with the information in the Social Security database.

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    Learn How To Report To The Irs For Non

    Although several non-profit organizations – including charities, foundations, social advocacy groups, religious groups, and trade organizations – are rightfully entitled to tax-exempt status, sometimes systemic abuse occurs.

    Non-profit fraud can occur if a non-profit organization engages in any type of illegal or unethical conduct involving its operations and finances.

    Allegations Of Fraud Associated With Treasury Operations

    New way to report IRS scams
    • Threats Against Treasury Employees or Facilities

    • Criminal and Serious Treasury Employee Misconduct

    • Fraud Involving Treasury Contracts, Grants, Guarantees, and Federal Funds

    • Treasury Financial Programs and Operations Crime

    • Cyber Threats Against Treasury Systems and Cyber-Enabled Financial Crimes Fraud

    • Fraud Related to Criminals Impersonating Treasury Agents and Employees

    • Fraud Related to Persons Representing Themselves as Sovereign Citizens Submitting Fictitious Financial Instruments to Treasury, Financial Institutions, Private Companies, and Citizens

    • Unregistered and Unlicensed Money Service Businesses

    • Travel and Purchase Card Fraud by Treasury Employees

    • Theft and/or Abuse of Treasury Government Property

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    File Your Completed Tax Return

    Calculate, pay any taxes you owe, and attach your return along with the completed Form 14039. Include all information needed and a photocopy of a document verifying your identity. Follow the instructions and send these files by mail or fax. Make sure to keep copies of everything you send to the IRS, youll receive a letter when they receive your Identity Theft Affidavit and tax return.

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