Tax fraud and violations cost the U.S. government billions of dollars annually. If you have knowledge of an individual’s or business’s underpayment of federal taxes, reporting it to the Internal Revenue Service (IRS) not only serves the public interest but may also qualify you for a financial reward. Below is an overview of the steps involved in making a whistleblower report to the IRS. A lawyer is not required to submit a tip to the IRS, but an attorney can help you protect yourself and file a strong tip. If you’re considering blowing the whistle on tax issues, please reach out to us for a free, confidential consultation.
Whistleblowers usually receive between 15-30% of the amount the government recovers thanks to their tip, as long as the total unpaid taxes and penalties are $2 million or more. If the government recovery amount is lower than $2 million, the IRS still has the discretion to give the whistleblower an award.
What Do You Need to Know to Report Tax Fraud and Avoidance?
Definition of Tax Fraud and Violations
The IRS has the responsibility for investigating and pursuing taxes that are owed but go unpaid, whether due to fraud, negligence, or mistake. Tax evasion can include underreporting income, falsely inflating deductions, improperly claiming tax credits, or strategically hiding assets and money offshore in an effort to escape tax obligations.
Required Information for Reporting
In order to report tax violations effectively, you need to have detailed information. The IRS requires “specific and credible information” for a valid claim. This ideally should include:
- A detailed description of the alleged tax noncompliance
- Any supporting documentation you have (tax returns, emails, receipts, bank records)
- Information about the person or entity involved
- Explanation of how you learned about the alleged violation
- Your name and contact information
Note that the IRS does not allow anonymous tips. But they work hard to protect whistleblower confidentiality.
Before making a report to the IRS, we strongly encourage you to reach out to a qualified whistleblower attorney who can help you consider your options.
Steps to Report Tax Fraud and Avoidance
The IRS’s Form 211 enables whistleblowers to report credible, accurate information about tax evasion and other forms of tax noncompliance for the opportunity to be rewarded.
Complete IRS Form 211
You must file Form 211 (Application for Award for Original Information), which includes these required elements:
- Written explanation of the tax violation
- Supporting evidence and documentation, including the location of documentation you do not have access to
- Description of your relationship to the noncompliant taxpayer (individual or company), including how you became aware of their tax underpayment
- Your signature affirming, under penalty of perjury, that the information in the form is true, correct, and complete to the best of your knowledge.
Submit Your Report
Check with the IRS, or an attorney, for the most up to date information about how to submit your report. As of the writing, you should mail the completed Form 211 with supporting documentation to:
Internal Revenue Service
Whistleblower Office – ICE
1973 N Rulon White Blvd.
M/S 4110
Ogden, UT 84404
After you submit your claim, the IRS will mail you a letter confirming receipt and providing a claim number. The IRS has published a Whistleblower Claim Process[LS1] overview with a flowchart about the steps the Whistleblower Office takes to process claims and estimates of how long each step takes.
Seeking Professional Guidance
Tax violations are a serious matter, and so is reporting them. Experienced whistleblower attorneys can provide invaluable guidance through this potentially difficult and drawn-out process. They can help strengthen your initial claim with compellingly presented evidence and help maximize the possibility of receiving an award. Partnering with knowledgeable legal professionals allows you to start on this path with greater confidence, knowing you are supported and protected every step of the way.
Making the Choice to Come Forward
Taking the brave step to report tax evasion not only promotes fairness and accountability but also upholds ethical standards that benefit society as a whole. By leveraging the right resources, including legal advice and secure reporting channels, you can make a significant impact while safeguarding your rights. If you are ready to take action or need guidance on the next steps, contact our team at Whistleblower Partners, LLP today for confidential support and experienced counsel. We can help you expose tax wrongdoing safely and empower you to make a difference.
