It is a sad fact of life that some people are willing to commit fraud for financial gain. The increase in the availability of Internet access has given rise to many new types of scams, where unscrupulous individuals claim to be Internal Revenue Service officials trying to contact you about an important matter. Most people choose to ignore email fraud because of the excessive amount of spam email received. On the contrary, reporting all types of fraud, especially if you suspect a company of trying to evade taxes, can help the IRS prevent this criminal act and punish its perpetrators.
You may have heard a boss talking about ways to hide assets and avoid taxes. Your neighbor might brag about fooling the IRS on his return. These are examples of fraud that take tax dollars out of the government--tax dollars that can go to providing services the country needs. The IRS has a form you can fill out for these matters, Form 3949-A, which then needs to go to the closest IRS headquarters.
Some people may want to report fraud in a more thorough manner than a form. The IRS does accept personal letters for fraud reporting, even anonymous letters. All that one needs to include in a fraud reporting letter is the name(s) and address of the suspect, a brief description of the alleged violation, the method used to acquire information about the violation and your contact information.
Reporting Phishing Scams
You probably have a few emails in your inbox right now that offer great rewards and riches for just a couple tidbits of personal information--these are likely a phishing scam. Reporting Internet scams is a different and easier process than reporting tax evasion. One can simply email the "header" or forward the whole email to the IRS at email@example.com. Opening any attachments could be dangerous, so it is best to just delete it after reporting to the IRS.
Can You Get a Reward?
The average person probably does not have time dedicated to fighting tax evasion, especially when it does not really affect him all that much. The IRS offers incentives to catch tax evaders but usually only in larger cases of evasion; it is usually not worth IRS budgetary expenses to go after someone who under-reports her taxes by a few hundred dollars. Whistle-blower rewards can amount to 15 percent to 30 percent of the total amount of evasion.
IRS fraudsters use many offline and online tactics. Shredding documents before throwing them out can stop thieves who dig through trash to steal Social Security numbers to file phony tax returns. You can spot phishing tax scams by looking for emails that offer to wipe out IRS debt or tax responsibilities. Never give your personal information out until you verify that the person you are talking to is from the IRS; the IRS does not ask for personal information over the phone or in an email.
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