How to Report Suspected Tax Evasion or IRS Fraud Anonymously

How to Report Suspected Tax Evasion or IRS Fraud Anonymously

Paying taxes is a civic duty that supports our communities. But some people try to avoid paying their fair share of taxes through evasion or fraud. This illegal activity cheats the government and honest taxpayers. If you suspect someone is committing tax evasion or fraud, you can report it anonymously to the IRS.

This article explains how to safely and discreetly report tax evasion or fraud. We’ll cover the reporting options, what information to include, protections for whistleblowers, and potential rewards. Read on to learn how you can anonymously help stop tax cheats and recover money for the public good.

Reasons to Report Tax Evasion and Fraud

Some people rationalize tax evasion or fraud, thinking it’s a victimless crime. But tax evasion and fraud hurt everyone. Here are some key reasons to report it:

• The government loses billions in tax revenue, which must be made up somehow. Often that leads to tax increases or cuts in public services.
• Honest taxpayers end up shouldering more of the tax burden.
• Tax cheats gain an unfair competitive advantage over law-abiding businesses.
• Fraudulent refunds drain money needed for roads, schools, defense, and other public services.
• In some cases, tax evasion is linked to other crimes like drug trafficking or terrorism financing.

By reporting tax evasion and fraud, you help recover lost money and deter future violations. Your information assists the IRS in enforcing tax laws fairly for all.

How to Report Tax Evasion or Fraud Anonymously

The IRS offers several anonymous options to report suspected tax evasion or fraud. You can choose the method you feel most comfortable with.

File Form 3949-A

IRS Form 3949-A allows you to report suspected tax law violations. This form can be filed anonymously either online or through the mail.

To submit the form online:

1. Go to the IRS website and find Form 3949-A.
2. Fill in the form with details on the suspected tax evader or fraudster.
3. Click submit.

To submit by mail:

1. Print out Form 3949-A.
2. Fill it out by hand with details on the suspect.
3. Mail it to the IRS at the address on the form.

With either method, you can leave the informant section blank to remain anonymous. The IRS will investigate the information and take action as warranted.

Call the IRS

You can also report tax evasion or fraud by calling the IRS directly. The number to call is 800-829-0433. When you call, simply provide the details on the tax evader or fraudster. You can choose to remain anonymous.

Contact the Treasury Inspector General for Tax Administration

Another option is contacting the Treasury Inspector General for Tax Administration or TIGTA. This organization handles investigations into IRS misconduct and abuse. To report tax evasion or fraud to the TIGTA, you can:

• Call their hotline at 800-366-4484.
• Complete their online complaint form.
• Mail information to:
• Treasury Inspector General for Tax Administration
• P.O. Box 589
• Ben Franklin Station
• Washington, DC 20044-0589

As with the IRS directly, you can choose to report anonymously through TIGTA.

Contact the Taxpayer Advocate Service

The Taxpayer Advocate Service (TAS) is an independent organization within the IRS focused on protecting taxpayers’ rights. The TAS has the power to analyze systemic IRS problems, propose changes, and intervene on behalf of individual taxpayers.

To report tax evasion or fraud to the TAS, you can:

• Call them at 877-777-4778.
• Complete their online form to request help.
• Mail information to:
• Taxpayer Advocate Service
• P.O. Box 939
• Buffalo, NY 14201-0939

The TAS allows anonymous reporting of tax issues and will work to resolve them.

What Information to Include in Your Report

To help the IRS thoroughly investigate potential tax evasion or fraud, include as many details as possible in your report:

• The tax evader or fraudster’s full name and contact information, if known
• Type of suspected violation (evasion, false refund claim, identity theft, etc.)
• Relevant dates and tax years
• Estimated dollar amount involved
• Description of the suspected illegal activity
• Names and contact info for other witnesses or involved parties
• Copies of any supporting documents or evidence

The more complete your report, the better the IRS can look into the potential violations. But even partial information is helpful, so don’t be afraid to report what you know.

What Happens After You File a Report

After you anonymously submit a report on tax evasion or fraud, here’s a look at what happens next:

1. The IRS screens the report to assess if the allegations warrant investigation.
2. If so, the information gets assigned to an IRS agent for follow up.
3. The agent further develops the case and collects evidence.
4. If the evidence substantiates illegal activity, the IRS may conduct audits, impose fines, or refer the case for criminal prosecution.
5. The IRS may follow up with the informant for further details if needed. But they will not disclose the informant’s identity.
6. For significant cases, the IRS may pay a monetary award to the informant (see next section).

With anonymous reporting, you may not find out the end result of the investigation. But the IRS takes all substantive reports seriously and pursues them accordingly.

Protections and Potential Rewards for IRS Whistleblowers

The IRS understands that informants who report tax evasion and fraud take on some risk. So they offer several safeguards and incentives:

Confidentiality

IRS employees are required to protect whistleblowers’ identities. Informants can report anonymously, and the IRS will not disclose their identities during or after an investigation. This helps avoid any retaliation.

Whistleblower Protections

Under IRC section 7623(a), IRS informants are protected from retaliation. Whistleblowers cannot be discharged, demoted, harassed, or otherwise discriminated against for reporting tax violations.

Monetary Awards

For substantial cases involving more than $2 million in tax fraud, the IRS may pay 15-30% of the recovered funds to the whistleblower. Awards for smaller cases are discretionary. These rewards provide an incentive for informants and help the IRS recover lost taxes.

Examples of Tax Evasion and Fraud

To give you a better idea of potential tax violations to report, here are some common examples:

• Not reporting cash income – A contractor or small business owner receives cash payments but doesn’t report them on their taxes.
• Inflated deductions – A filer exaggerates expenses, charitable contributions, or business losses to lower their taxable income.
• Hidden offshore accounts – A taxpayer stashes money abroad in secret accounts and doesn’t disclose it to the IRS.
• Fake identity – Someone files a false return using a stolen or fabricated ID to claim a fraudulent refund.
• Abusive schemes – Lawyers, accountants, or advisors promote complex but illegal schemes to evade taxes.

There are many other creative ways tax cheats try to skirt the law. If you see something suspicious, report it and let the IRS determine if it warrants investigation.

The Bottom Line

Tax evasion and fraud unfairly burden honest taxpayers and deprive the government of revenues needed for important public services. If you suspect someone is cheating on their taxes, you can anonymously report it to the IRS through various channels. Your information helps recover lost money and ensures fair enforcement of tax laws. By reporting tax violations, you protect the interests of all taxpayers.