The Internal Revenue Service (IRS) encourages taxpayers to report tax fraud and abusive tax schemes.
Taxpayers of all socioeconomic backgrounds fall victim to tax fraud—especially those with high wealth. On the flip side, business owners and high-asset individuals may also be tempted to take liberties with their own returns and regulatory obligations. Awareness of the ways and means by which the IRS learns of suspected tax fraud can help if you are a victim of a tax crime, or if you are involved in one.
In this space, we often examine tax crime, how it is committed, and how it is discovered by the IRS. It is important to understand that in addition to IRS audits and criminal tax investigations, the IRS solicits reports from the public about whether they are a victim of a tax scam or if they know someone who is profiting from a potential tax crime.
Using an Informational Referral, people can report a multitude of tax crimes, just some of which include:
- Failure to report income figures accurately, including income from illegal drug sales or gambling.
- Tax crimes involving organized crimes, corruption schemes, and abusive tax avoidance schemes.
- Failure to file returns, filing false documents, scams involving filing multiple returns, or those involving identity theft.
- Taxpayers taking fake deductions, exemptions, or taking advantage of tax credits.
You can also tick the box “Other” on the Information Referral to report activities you believe to be illegal. The IRS reviews each submission for potential follow-up like an audit or a tax investigation. You can also report other persons and entities engaged in illegal tax behavior including tax preparers, marketers of tax schemes, and tax-exempt organizations that are coloring outside of the lines.
Do you know someone making a fine living from gambling income who boasts they pay no taxes? What about your business owner friend who mentions each year over lunch the false deductions his accountant created for him? While the IRS appreciates knowing who sent in the Referral, no identifying information is required.
And for those of you involved in employment tax fraud, or otherwise engaged in a tax crime? Give some thought to how long it will take for your luck to run out. Before it does, connect with an experienced criminal tax attorney for help.
Talk to our attorney group for experienced guidance and representation regarding tax controversy or crime
With offices in Cleveland and Chicago, the legal group at Robert J. Fedor, Esq., LLC delivers skilled representation on IRS audits, employment tax fraud, and other tax controversies. Call 440-250-9709 or contact us online today.
