How to Report Tax Fraud When You Expect It

You suspect that someone is committing tax fraud, but you’re not sure what to do.

How do you report tax fraud? Should you call the IRS fraud reporting number?

The Internal Revenue Service has specific procedures in place that involve filing a form to report the type of fraud you believe may be taking place.

Here’s how to report tax fraud.

How do I Turn Someone in for Tax Fraud?

Print Form 3949-A from the IRS website or request the form by calling the Tax Fraud Hotline recording at (800) 829-0433. (Alleged tax law violations referrals are not accepted by phone.)

Mail the form to Internal Revenue Service, PO Box 3801, Ogden, UT 84409 to report the following:

• False exemptions or deductions
• Kickbacks
• False/altered documents
• Failure to pay taxes
• Unreported income
• Organized crime
• Failure to withhold
• Payroll Fraud

You may also send a letter to the address instead of the form. Send as much information as possible, including the name and address of the person you are reporting, the Social Security number and/or employer identification number if you have it, the description of the offense, years involved and estimated dollar amount of unreported income.

How do I Anonymously Report Someone to the IRS?

You are not required to identify yourself, but the IRS says it is helpful to do so, and your identity will be kept confidential.

Some instances may require you to share your identity, especially if the fraud is related to a situation like a tax professional working on your tax refund.

How to Report Other Types of Suspected Tax Fraud

Other types of forms are required for other types of suspected tax fraud. Don’t use Form 3949-A to report the following:

• Stolen identity – Form 14039. Mail or fax it to office listed on the form. Include a document to verify your identity. For more information, go to the Taxpayer Guide to Identity Theft.
• Tax preparer fraud – Form 14157 and possibly Form 14157-A. You can complete the form online, then print it and mail it to the address on the form.
• Unauthorized alteration of your tax form by tax preparer – Form 14157 and Form 14157-A. Send both forms to the address on the form.
• Abusive tax promotion or promoter – Form 14242. Mail or fax it to the office listed on the form.
• Wrongdoing by an exempt organization or employee plan – Form 13909. Mail it to the address on the form.
• Fraudulent IRS emails or websites – Contact the IRS immediately on its phishing web page.

Do You Get Anything for Reporting Tax Fraud?

If you have information and want a reward, fill out and submit Form 211. Mail it to address on the form.

There are two types of informant rewards:

1. The IRS will pay 15-30 percent of taxes, penalties and interest collected over $2 million
2. Smaller rewards may be paid for lesser amounts collected

See Whistleblower Rules at IRC Section 7623(b).

What is the Tax Fraud Hotline?

The IRS fraud hotline is a toll-free number you can call to get information about reporting suspected fraud. You cannot file a report when you call. However, you can get details on submitting a form or letter to report suspected fraud and downloading the reporting form from their website or ordering one using the hotline.

Again, the toll-free IRS fraud hotline number is (800) 829-0433.

How to Protect Your Business’s Finances

When it comes to protecting your business’s finances, you need to work with a trusted accounting firm. They can help you implement internal controls or processes to detect suspicious activity and provide representation for the IRS and other taxing authorities.

At 415 Group, our certified public accountants work with businesses throughout Ohio to help them stay in compliance and navigate the complexities of the tax environment.

Have questions about how to report tax fraud or other tax issues? Learn more about our tax services or reach out today.