Whistleblower Reward Form 211 from the IRS and US Federal governments - Can Canada be far behind ?

David, How do i claim a reward from the goverment for turningi n someone who is cheating on their taxes BIG time?

david ingram replies:

Canada does not have a reward system that I know of. The US has had a 10% reward for years and is in the middle of passing new legislation offering up to 30% as a reward for whistleblowers.
The legislation has been passed by the US Senate but has not been passed by the House of Congress yet.
See the AP story following the IRS notice - up to 30% reward of the amount recovered by the IRS
Where And HOW Do You Report Suspected Tax Fraud Activity?

Use form 211 at http://www.irs.gov/pub/irs-fill/f211.pdf

If you suspect or know of an individual or company that is not complying with the tax laws, report this activity. Reports of suspected tax fraud can be made by phone, mail or your local IRS walk-in office.

By phone:
You can contact the IRS toll free at 1-800-829-0433.

International callers may call their US Embassy or call 215-516-2000 (this is not a toll-free number).

By mail:
Written correspondence can be mailed to the service center where you file your return. Addresses can be found at; Where to File Addresses

Although you are not required to identify yourself, it is helpful to do so. Your identity can be kept confidential. You may also be entitled to a reward.

If you are a taxpayer who lives outside the United States, the IRS has full-time permanent staff in 7 U.S. embassies and consulates. Contact My Local Office Internationally has telephone numbers and addresses of these offices.

Walk-in Offices:

IRS Taxpayer Assistance Centers locations can be found at Contact My Local Office.

If you are a taxpayer who lives outside the United States, the IRS has full-time permanent staff in 7 U.S. embassies and consulates. Contact My Local Office Internationally has telephone numbers and addresses of these offices.

Frequently Asked Questions - 1.13 IRS Procedures: Reporting Fraud

Criminal Investigation (CI)

Tax Fraud Alerts

Plan Would Pay Tax Whistleblowers
Fri Jun 18, 8:28 PM ET


WASHINGTON - Suspect your company's cheating the IRS out of millions in taxes? Pass along the inside information to the Internal Revenue Service (news - web sites) and you stand to collect up to 30 percent of taxes and penalties recovered under whistle-blower legislation aimed at snaring high-dollar tax cheats.

The proposed IRS Whistleblower Office is designed to give tax agents an inside advantage when fighting complicated, often invisible tax shelters developed for and used by wealthy taxpayers and corporations.

It would go after individuals and corporations with more than $200,000 in income who use shelters that hide $20,000 or more.

Informants who blow the whistle on tax evasion stand to win 15 percent to 30 percent of the recovered taxes and penalties if they contribute substantially to the case. Those who make less substantial contributions can win up to 10 percent of recovered money.

The chairman of the Senate Finance Committee, Charles Grassley, R-Iowa, modeled the office after the False Claims Act, which lets people file lawsuits against companies and individuals that defraud the government in arenas other than tax.

The Justice Department (news - web sites) reported that lawsuits filed under the False Claims Act recovered $1.5 billion in 2003. Whistle-blowers were granted $319 million in rewards. More than $12 billion has been recovered since Congress strengthened the law in 1986.

"Taking advantage of whistle-blowers has saved the taxpayers billions of dollars in defense and health care fraud. The potential is even greater with tax fraud, given the estimated hundreds of billions of dollars of taxes due that go uncollected each year," Grassley said.

The IRS currently has a fraud hot line and its own criminal investigation unit. Informants can apply for rewards when taxes are recovered based on their tips, but critics say the program has too many obstacles to lure many informants.

In 2003, the IRS paid out $4 million to informants who helped the IRS pursue 190 cases, which together recouped more than $61 million in taxes owed. IRS statistics show that the agency has paid an average of 2.74 percent of recovered taxes as rewards to informants since 1967.

James Moorman, president and chief executive of Taxpayers Against Fraud, said the better the reward, the more people come in with tips. His organization educates the public and supports whistle-blowers who sue under the False Claims Act.

Moorman said he did an unofficial survey of fraud attorneys about the need for a tax informants' program.

"These people think that this whistle-blower office, if properly implemented by the IRS, would be bigger than the False Claims Act," he said.

Moorman said the current IRS system suffers because it disqualifies people who have participated in tax evasion or prepared the suspect tax returns from getting awards. That eliminates from becoming useful whistle-blowers people who are either drawn into tax fraud reluctantly or unknowingly or who have a change of heart.

"Is the reward only for Boy Scouts and Girl Scouts? People who are pure?" he wondered.

Mary Louise Cohen, who represents whistle-blowers as a partner at Phillips & Cohen in Washington, D.C., said people also need the money for practical reasons. Many whistle-blowers who come to her have tried to work within their jobs to end fraud, risked their careers and often were fired.

"They have families and mortgages and kids who have to go to school," she said. "They're motivated by trying to correct situations that they see are wrong, but the money makes it possible for them to do that and still take care of themselves."

The office is a tiny item in a massive corporate tax bill passed by the Senate. The version of the bill passed in the House does not include such an office.

Treasury Department (news - web sites) spokeswoman Tara Bradshaw said the administration looks forward to reviewing the proposal while lawmakers reconcile the differences between the House and Senate tax bills.

Next Story: House Rejects Plane Cargo Inspections (AP)
More Politics - Congress Stories
· House Rejects Plane Cargo Inspections (AP)
· Senate to Take Up Gay Marriage Amendment (AP)
· House RollCall Cargo (AP)
· Sen. Edward Kennedy to Host Talk Show (AP)
· Senate, House Split on Corporate Tax Bill (AP)


Trackback URL for this entry: http://www.centa.com/trackback.php/20060825154635186

No trackback comments for this entry.