Tax Fraud

You usually know of the Internal Revenue Service (IRS) as the people who enforce that you pay your taxes, but they also enforce laws against identity theft related to tax fraud.

If you were the victim of a tax fraud, you can visit the IRS Taxpayer Advocate Service at www.irs.gov/advocate or call them at 1-877-777-4778.

There are multiple categories of Tax Fraud.  They include:

• Corporate fraud – tax evasion by wealthy people or large companies
• Money laundering – engaging in financial transactions in order to conceal the identity, source, and/or destination of money
• Abusive tax schemes – a series of transactions designed solely to avoid income taxes
• Tax scams – a means of getting money by coming up with an erroneous story related to your taxes
• General tax fraud – not reporting all the income you’ve made in a year
• Abusive return preparer – preparing bad returns for large numbers of taxpayers

You can find out more about these frauds at the IRS website.

Perhaps you are not personally suffering from tax fraud, but you know of a company or individual that is breaking a tax law, you should report them to the Internal Revenue Service Criminal Investigation Informant by calling by visiting the IRS website or calling 1-800-829-0433.

If you would rather mail them a letter, you can do so by sending it to The Internal Revenue Service, Fresno, CA 93888.  Be sure to include the following in your letter: the taxpayer’s social security number, a brief explanation of the suspected fraud, how you became aware of the fraud, the approximate amount of the money underreported, and your personal contact information.

You are not required to submit your personal information, you do have the right to remain confidential; but it may be in your best interest to report your information because there are rewards sometimes for reporting a tax fraud.

The reward is made possible by the Tax Relief and Health Care Act of 2006.  This provides that if a company’s underreported amount exceeds $2 million or an individual’s household income is over $200,000, you can receive a reward of 15-30% of that money.

If you know of someone who is stealing from the government, don’t allow them to get away with it.  Report them right away to the IRS so that they can be prosecuted, and if you're lucky, you’ll get a reward.