Tax Evasion

1. How do I report tax evasion from a large a corporation?

The short answer is, you need to file an IRS Form 211, Application for Award for Original Information with the IRS’ Whistleblower Office in Washington, D.C. If you use an attorney to file your report then you also need to file an IRS Form 2848, Power of Attorney and Declaration of Representative. Although not required, it is a best practice to also file a disclosure statement that lays out your allegations and provides an investigative road map for corroborating documents and witnesses.

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2. Is there any downside to reporting tax evasion?

You may end up reporting on yourself. Therefore, it is very important to be aware of any tax liabilities you may have as a result of the tax evasion that you would like to report. It is also possible your whistleblower status may become known even though the IRS will protect your identity as a whistleblower to the fullest extent permitted by the law.

3. Can you get a tax whistleblower reward only if the IRS collects money from the person/company who committed the tax evasion?

Yes, all awards are paid out of collected back taxes, penalties and interest. The law governing whistleblower rewards is found at Title 21, United States Code, Section 7623.

4. How much of a reward can an eligible tax whistleblower receive?

Generally, the IRS will pay an award between 15% and 30% of the collected proceeds resulting from administrative or judicial actions (including related actions) or from any settlement in response to an administrative or judicial action. The maximum award percentage decreases to 10% percent if your case is based principally on publicly disclosed information (such as from government audit reports). The Whistleblower Office also can reduce your award if you planned and initiated the actions that led to the underpayment of tax. It should also be noted that not everyone can be an eligible whistleblower and not every instance of tax evasion is subject to the whistleblower law.

5. What are the monetary limitations for reporting tax evasion?

To qualify for a whistleblower award, the information must:
 • Relate to a tax noncompliance matter in which the tax, penalties, interest, additions to tax, and additional amounts in dispute exceed $2,000,000; and
• For individual taxpayers only, relate to a taxpayer whose gross income exceeds $200,000 for at least one of the tax years in question.

6. How far back in time will the IRS look at allegations of tax evasion?

Ordinarily, in making its assessment the IRS will go back three years from the date after a tax return is due or filed, whichever is later. However, if a taxpayer omits from the gross income stated in the tax return an amount that is in excess of 25 % of the gross income so stated, the timeframe can extend to 6 years after the return was filed. Additionally, there is no statute of limitations where a taxpayer files a false or fraudulent return with the intent of evading taxes.

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