- Government Procurement Fraud
- Pharmaceutical Fraud
- Medicare and Medicaid Fraud
- Defense Contractor Fraud
- Education Fraud
- Banking and Mortgage Fraud
- Securities Fraud
- Tax Fraud
“Taxes are what we pay for civilized society.”
– Justice Oliver Wendell Holmes, Jr., Supreme Court of the United States
It is widely known that numerous individuals, corporations, trusts and other entities commit tax fraud, often by deliberately misrepresenting or concealing the true state of their affairs to tax authorities including the IRS. Tax fraud costs theUnited Stateshundreds of billions of dollars each year.
The IRS whistleblower program exists to uncover tax fraud and collect underpaid and unpaid taxes by rewarding whistleblowers who provide information exposing tax fraud to the IRS. The whistleblower program was instituted in 2006 and mandates, in certain circumstances, the payment of awards to whistleblowers who provide information leading to the collection of fraudulently withheld taxes.
Awards to whistleblowers are mandatory when the whistleblower provides information leading to a successful IRS action where the fraud involves more than $2 million. In those circumstances, a whistleblower will receive between 15% to 30% of the amount the government collects. There is no dollar limit on the amount a whistleblower may be awarded. See our IRS Whistleblower FAQ [link to FAQ] section for a more detailed discussion.
Common Forms of Tax Fraud
Tax fraud takes many forms, but some of the most common include:
- Concealing, Deliberately Underreporting, or Omitting Income
Underreported income takes two primary forms. The first is when individuals or businesses tell the IRS they made less money than they actually did during the tax year. The second is when individuals or businesses claim more deductions, exemptions or tax credits than they deserve. According to the IRS, underreported income is the largest single form of tax evasion, accounting for several hundred billion dollars worth of fraudulently withheld taxes each year. Also according to the IRS, individuals who own their own businesses are most responsible for underreported income.
- Hiding or Transferring Assets or Income Out of the United States
A 2008 Senate report concluded thatU.S.taxpayers have used secret offshore bank accounts to illegally avoid paying at least $100 billion annually. Offshore accounts are a popular place to hide both illegal and legally earned income. Even where income is legally earned, taxpayers – often corporations and wealthy individuals – hide that income in offshore accounts, depriving the United States of substantial tax payments.
- Misuse of Trusts
Some taxpayers establish legal business trusts, equipment or service trusts, and family residence trusts, for the purpose of illegally avoiding the payment of taxes they owe on business income, rental or lease equipment, and residences.
- Tax Return Preparer Fraud
Tax return preparer fraud involves the preparation and filing of false income tax returns by preparers who claim inflated personal or business expenses, false deductions, unallowable credits, or excessive exemptions on returns prepared for their clients. Tax return preparer fraud does not require the knowledge of the preparer’s client, the actual taxpayer.
Tax Fraud Attorneys
Robbins Geller Rudman & Dowd LLP is committed to fighting for our whistleblower clients in their courageous efforts to combat fraud. If you are aware of an instance where a business, individual, trust, or other entity is committing or has committed tax fraud and are thinking of blowing the whistle, please contact Jonah H. Goldstein or James E. Barz.. We can help you understand how to file a claim, what compensation you may be entitled to for your effort, and what protections you are afforded as a whistleblower, and can answer any other questions you may have concerning the IRS whistleblower provisions.