- IRS Form 211
The Internal Revenue Service (IRS) is willing to take tips about businesses or individuals who illegally avoid paying taxes. It will even share a percentage of the taxes recovered with the person giving the tip. The IRS Whistleblower Office administers the program, rewarding tips that are "specific and credible" with as much as 30 percent of the recovered taxes. There are some strict rules that you must follow in order to collect money, though.
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Filing an IRS Whistleblower Complaint
File Form 211, and mail it to Internal Revenue Service, Whistleblower Office, SE: WO, 1111 Constitution Ave., NW, Washington, D.C. 20224.
Check your evidence to make sure it is accurate. By filing the form, you are making claims "under penalty of perjury," and, as the form itself states, "providing false information may subject you to penalties."
Give the name of the IRS employee whom you initially contacted, the name and address of the tax violator, all information about the violation, your relationship to the violator and how you discovered the information, and the amount owed. Be thorough, and provide all the evidence that you can. Also, report where there is evidence that you were not able to acquire. Do nothing illegal to acquire information. Do not file the form if you are a federal, state or local employee and discovered the information as part of your job; if you found the information by serving with the government; if you are a corporation and not an individual; if you are prevented by law from revealing the information; or if you want to remain anonymous.
Expect 15 percent to 30 percent of the total as a reward if the IRS finds that the person or company owes the tax, but only if the amount is over 2 million dollars or the individual has an income of over $200,000 a year. If you disagree with the IRS's rulings, you can appeal.
Expect at most 15 percent if the company owes less than $2 million or if the individual earns less than $200,000 a year. For these smaller fish, the award is at the discretion of the IRS, and you cannot appeal their decision. The same Form 211 is used to file for both the higher-amount and lower-amount programs.
Hire a lawyer. While the IRS has no rule that requires that you do so, it often makes reference to the whistleblower's lawyer in its instructions. If you need to appeal the amount of your award, you will want legal advice. Also, whistleblowers are often unpopular, and legal protection is advisable.