If you have knowledge about a tax evader, there are rewards for turning them in. Under the Tax Relief and Health Care Act of 2006, you can receive between 15% and 30% of the tax, interest, and penalties recovered, if that amount exceeds $2,000,000. Smaller cases are also subject to smaller rewards.
During the fiscal year 2008, the Whistleblower office received 476 referrals relating to nearly 1,500 taxpayers, with 64 alleging evasion of more than $100 million in tax.
The identity of the whistleblower must be revealed to the IRS, but is kept completely confidential and is sealed in separate files. The protection of the whistleblower is a priority for the IRS.
Aaron's Take: Knowledge of tax evasion is a serious ethical dilemna for employees. Additionally, a company employee may not have all of the information necessary to substantiate the claim of tax evasion (a very high bar). The availability and protection of a whistleblower is necessary for the proper function of our voluntary tax system. The term voluntary refers to the fact that we voluntarially file our tax returns, and it is important to direct our enforcement to those that refuse to participate in the process honestly.
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