How do I Report Possible Tax Fraud?
As long as there are rules and regulations, there will probably be those who break them. Each year, a small percentage of people attempt to cheat on their taxes in an effort to owe less and/or receive a larger refund. Sometimes people do make mistakes on their tax returns, but mistakes are generally not considered fraud. Tax fraud is the intentional attempt to avoid paying the amount of taxes required, reporting income, and/or filing returns.
Some people may wonder whether they should report tax fraud, thinking it a victimless crime. However, the failure to meet tax obligations can have a harmful effect on the economy. It is considered a crime in the United States as well as in some other countries.
Before you can report tax fraud, it's wise to learn the types of offenses you can report. You can report a person for claiming deductions to which he's really not entitled, hiding or transferring assets or income, and intentionally changing the amount of income on his tax forms to an incorrect amount. Tax fraud also includes over-reporting deductions, keeping false books and records, and having two sets of bookkeeping records with differing figures in them. Even such things as claiming personal expenses as business expenses count as tax fraud.
It is fairly easy to report federal tax fraud in the United States. To do so, a person can visit the IRS website and print out Form 3949-A. This form should be filled out and mailed to the Internal Revenue Service, Fresno, CA 93888.
If a person wants to report tax fraud but does not have access to this form, he may mail a letter to the same address. The letter should include the name and address of the accused, the Social Security number or employer identification number of the accused, and the estimated amount of unreported income. The letter should include a description of the tax violations as well as information that explains how the reporter learned of the fraudulent activity.
A person can file a fraud report anonymously. However, the IRS does ask for the name, address, and phone number of the person who reports the fraud. This information is kept confidential, but it may help the IRS to investigate the claim. To report tax fraud in other countries, a person should contact the local tax administration agency and ask for instructions.
This lady filed her live-in boyfriend on her taxes and he was in prison for the entire year. Is that legal?
@anon51883: I actually have the same question, except in my case I only know the last four of that person who has been committing fraud for over five years. I would like to know if I can still report them since I have all their other information.
@ anon51883 - You don't have anything to lose by trying it, do you? Just give the IRS all the information you have.
If you've been a victim of tax fraud, though, you might actually have access to the employer identification number or Social Security number of the other person.
For instance, my niece was babysitting for a couple and received the usual cash payments. Well, come January, they gave her a 1099 -- showing that she was an independent contractor of their business! She wound up having to pay self-employment tax, which was quite steep.
But -- obviously she didn't work for the business and the couple was not entitled to take a tax break on what they paid her. She could have reported them to the IRS easily because the business's tax ID number was on the 1099! But she explained that to them and got them to fix it on their end.
How can one report a tax fraud if one does not know the Social Security number of the accused? Can one use just the address and the names of the accused?
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