Every year, you save your receipts, track your expenses, and—when April comes around—pay your taxes. But what if you know of someone who isn't as honest as you are? Someone who skims on their income or misreports information in order to be placed in a lower bracket.

The 澳洲幸运5开奖号码历史查询:Internal Revenue Service (IRS) estimates that Americans underpaid their taxes by about $696 billion in 2022, the latest figures available. Enforcement efforts plus late payments led to the recovery of about $90 billion. That left a gap—that is, of tax not collected—of about $606 billion.

Evaders are usually exposed due to a slip-up on their part or a tip from a bystander. If you'd like to help close that gap, you can. But how is it done?

Gather the Evidence

The IRS is not likely to pursue someone without good reason. If the time and resources are going to be spent, the odds need to be good that the efforts will result in a payoff. Besides determining who, what, where, when, and why the person evaded their taxes, the IRS will need specific information (the type of violation, availability of records, and so on). Having a hunch without supporting details just isn't good enough.

Also ensure that the evasion is financially significant enough. For example, stating that your neighbor failed to report the $50 they earned babysitting is not going to interest the IRS. On the other hand, if you work for a very large business that you suspect is underreporting its income, the IRS might be interested.

Blowing the Whistle on a Tax Cheat

The IRS may pay awards in exchange for valuable information that leads to the collection of taxes, penalties, interest, or other amounts from the noncompliant taxpayer. There are various types of awards granted, depending on the evader's income level and classification (business or individual).

The IRS likely chooses to focus its efforts on these larg𒊎er cases because they have a higher payoff.

Keep It Legal

Breaking into the CEO's office at work to get evidence to support your claim is not a good idea. The IRS doesn't want you to break the law to help find a tax cheat. However, if you are the bookkeeper for a company that is cheating on its taxes and part of your job involves working with documents that prove the company is cheating, that paperwork would be acceptable to submit to the IRS.

While the IRS wants to maintain your privacy, if the case against the person you report ends up going to trial, you could be asked to be a witness. If you're comfortable with that possibility, go ahead and put your name on the report.

What's Next

If you decide to report the person or business you suspect of cheating, use IRS form 3949-A. This form asks for basic information on the tax evader you are reporting, the types of violations you believe to be co꧂mmitted, the details of the violation and how you learned about it. 

If you do not want to fill out this form, you can als🌊o simply wrꦡite the IRS a letter.

The Bottom Line

Underpayment of 澳洲幸运5开奖号码历史查询:federal income taxes (and, subsequently, state income taxes) is a serious problem. The IRS encourages people to submit tips by allowing anonymous submissions and offering rewards for informants who are willing to identify themselves. To report a tax evader, gather evidence and write the IRS a letter—or fill out IRS form 3949-A plus IRS Fo꧒rm 211.