Every year, thousands of Americans fraudulently hide assets or misrepresent losses to the Internal Revenue Service (IRS). They do so in an effort to limit or eliminate their potential tax liability. These actions are known as tax fraud, and they carry steep criminal penalties.
In an effort to combat tax fraud, the IRS pays monetary awards to certain whistleblowers that turn over evidence of fraud to the federal government. When the IRS takes action against those perpetrating the fraud, the whistleblower then receives a portion of the tax debt they recover. There are some unique challenges with pursuing a whistleblower claim that make it a difficult option without the help of a skilled whistleblower attorney. A Charleston IRS whistleblower lawyer could help you shed light on tax fraud and pursue the award you are entitled to recover.
Initiating a tax whistleblower claim begins by filing a form with the IRS. This document is referred to as Form 211. Completing this form requires a set of information that can assist the IRS with investigating the allegations.
First, an applicant must lay out the specific facts of the alleged violation. This could include allegations of underpaying taxes or hiding taxable income. The form also asks for information regarding the specific illegal nature of the acts in question.
Next, the form requires background information on how the applicant came to learn their information. These disclosures often come from employees or coworkers, but they could also come from friends, family, or acquaintances.
The final step requires the individual to describe in detail the amount of taxes allegedly avoided. This could be a broad estimate or an exact value depending on the circumstances. An IRS whistleblower attorney in Charleston could assist a whistleblower with identifying the amount that is owed.
Unfortunately, it is not possible to file a whistleblower claim anonymously. Without identification, a person will not be eligible to recover an award should their allegations turn out to be true. However, there strict regulations regarding the duty of the IRS to keep the identity of a whistleblower secret. The IRS cannot name the whistleblower during the settlement of the case. In fact, they are prevented from ever acknowledging their existence at all unless it becomes necessary for the investigation to continue. In these limited situations, the IRS must notify them first before proceeding.
Simply filling out and filing Form 211 will not guarantee an applicant a monetary award. To be eligible, the applicant must provide credible and specific information. Anyone can submit these forms, including noncitizens.
If the information provided by the whistleblower results in the collection of penalties, back taxes, or fees, the IRS will pay that person between 15 and 30 percent of what is collected in disputes worth more than $2 million. For smaller amounts, a whistleblower could recover as much as 15 percent of the amount in controversy. An attorney could work to ensure a whistleblower in Charleston receives the award they are entitled to from the IRS.
The process of pursuing a whistleblower claim and obtaining a monetary award can be challenging. Failing to follow the process exactly could result in the loss of an award even when the information provided was useful.