The Internal Revenue Service doesn't make it particularly easy to report tax fraud. The IRS is a big, complex entity and different kinds of fraud exist, so depending on the type of dishonesty you've discovered, you might have to make your report to a certain department. The IRS website lists the forms you must complete and the avenues you'll have to take for reporting different types of fraud. While you do not necessarily have to reveal your identity to report someone to the IRS, you could receive a monetary award if you do.
IRS Fraud Reporting: Not Always Anonymous, but Not Public
The basic IRS informant program offers a reward of up to 30 percent of the money the government recovers because of your tip if the excess amount recovered is more than $2 million. Typically, this involves reporting on average taxpayers, not mammoth-sized corporations (but the individuals must have income of over $200,000 per year). If the amounts are less than $2 million or the taxpayer makes less than $200,00 per year, the maximum award is 15 percent.
Although you can make these tips anonymously, the problem is obvious – if you don't reveal your identity, you can't collect the reward. However, these reports are confidential – the government won't reveal your name to the person or company they're investigating, and the public won't know your name. However, you may have to supply certain documents and information about the taxpayer to substantiate your claim. Some of this information will probably be personal, such as a Social Security number or copies of financial documents, and only someone close to the taxpayer would be aware of it or be able to access it. Additionally, tax fraud is a criminal matter. If the IRS decides to prosecute, you may have to testify, so your identity would then become known.
Making the Fraud Report
In many cases, you can't report fraud to the IRS by making a phone call and whispering the incriminating information to whoever answers the line. The government offers forms on the IRS website that you must complete and either fax or mail in. It also offers a toll-free hotline, but the operators can only give assistance for accessing the form and submitting it. Online scams, like phishing, can be reported online to the Treasury Inspector General Administration or to the IRS via email.
Read More: How to Report Tax Fraud
You can report suspected tax fraud to the IRS anonymously either through the IRS website or by mail or fax. How you report will depend up on the type of fraud you're reporting. If you want to take advantage of the IRS's informant program reward, you'll have to provide your identity to the government; however, it will be kept private. On the other hand, the taxpayer may discover your identity if you have to testify against her in a criminal case.
Beverly Bird is a practicing paralegal who has been writing professionally on legal subjects for over 30 years. She specializes in family law and estate law and has mediated family custody issues.