Every year, millions of citizens dutifully file and pay their taxes to the IRS. However, hiding away in every state, sometimes behind an unlikely profile, are people who are refusing to pay their due taxes, avoiding filing returns, or even disregarding some parts of their income in order to keep their tax bill low. If you happen to know someone who is cheating the IRS at tax time, you could possibly make a profit by turning them in as a whistleblower informant for the IRS. If this is something you are considering, you are bound to have a few questions.
How do you actually blow the whistle on someone who owes the IRS?
In order to turn someone in, you will actually file a claim with the IRS that is referred to as a Whistleblower Award Claim. The claim process starts by you filling out form 211 from the IRS. This form will ask for details about the entity or individual that you are filing a report on, such as:
- their address and location
- what tax laws you believe have been broken
- how you discovered the individual was breaking tax laws
- what your relationship is to the individual or entity you are reporting
What do you have to have to file a whistleblower claim?
In order to file a whistleblower claim with the IRS, you must be able to offer concrete proof that a law has been broken. Claims that are made based on speculation only will not be taken seriously. Therefore, it is best that you have some form of documented proof of the claims you are making where tax laws are concerned. For example, if a previous employer was claiming to pay out more in wages than they actually were to avoid paying taxes on profits, you would need a piece of evidence that proves this was the case.
What happens once a claim is filed?
Once you have provided Form 211 and any relative evidence or supporting documentation, the claim will be entered into a database with the IRS and soonafter assessed by an IRS employee. During this investigation, you may be contacted by the IRS to discuss the details of the claim. Unless legal procession takes place as a result of the claim, your identity will usually be kept confidential during the investigation and proceedings. If it is determined that your claim is true, you may be entitled to monetary rewards as a percentage of the owed tax bill.
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