What Information Can Be Reported to the IRS Concerning Tax Fraud?

Do you have information about or evidence of a business or individual avoiding tax liability? The Internal Revenue Service (IRS) rewards individuals (“whistleblowers”) who blow the whistle or report to the IRS on businesses and wealthy individuals who cheat the federal government out of paying their share of taxes.

What Information Can Be Reported?

The whistleblower does not need direct knowledge of the fraudulent actions, failure to pay, or underpayment of taxes, but the whistleblower must have specific, credible evidence for an IRS investigation.

Any fraudulent actions, failure to pay, or underpayment of taxes can be reported by the whistleblower. The most obvious ways to defraud or underpay taxes are the following:

  • Underreporting income
  • Overstating deductions
  • Accelerating depreciation
  • Concealing assets
  • Falsifying records
  • Transferring funds between companies to generate artificial tax benefits
  • Transferring funds to offshore accounts or other tax havens in order to conceal assets, accounts or income
  • Cryptocurrency

How to Report

The Tax Relief and Health Care Act was passed by the United States Congress in 1996. The Act created the IRS whistleblower program, which substantially rewards whistleblowers up to 30% of the amount collected by the federal government from the whistleblower’s specific, credible information given to the IRS. The greater the whistleblower’s contribution to the IRS investigation, the greater the whistleblower’s reward. For the whistleblowers to receive an award for information about businesses and wealthy individuals cheating or under-reporting their taxes, the disputed tax amount must be more than $2 million.

If you would like to receive an award by acting as a whistleblower, Montgomery Ponder, LLC can assist you with completing the petition and Form 211, along with reviewing and report all pertinent information and documentation in support. The IRS’s prosecution of whistleblower petitions continues to increase. In 2018, the Whistleblower Office made awards to whistleblowers exceeding $312 million and collected $1.441 billion.

Even if the evidence given to the IRS by the whistleblower is based upon information already in the public domain, the Whistleblower Office may award the whistleblower an amount up to 10% of the taxes collected.

As you can see, a whistleblower with specific, credible information may receive an award that amounts up to millions of dollars from the Whistleblower Office if such information is reported to the IRS. Further, the whistleblower will be holding the business or wealthy individual accountable for the tax liability in which they owe the federal government.

Montgomery Ponder’s experienced attorneys possess extensive knowledge of relevant IRS rules and regulations. We can assist you in submitting your petition and making sure you, as the whistleblower, will be awarded a greater percentage of the tax collected from alerting the IRS of the cheating or under-reporting of the tax liability.

Contact Montgomery Ponder if you have information or evidence of a business or individual avoiding tax liability. Our Birmingham whistleblower lawyers are here to help.