If you suspect that an individual is not fulfilling his or her tax obligations (for example he or she is evading taxes), you have a right to report this to the IRS. You do so by filling in Form 3949-A Information Referral and sending it to the IRS in Fresno, California. Alternatively, if you wish you may send a letter with the relevant information. Your letter should contain the name and address, social security number (or business employer identification number) of the person (or business) you are reporting, a description of the alleged transgression done, including how you came to know about the case, how long has the alleged violation been going on, the estimated dollar amount of any unreported income and finally, your name, address, and telephone number.
If you do not wish to identify yourself with the IRS, you may remain anonymous. But you may want to consider revealing your identity in case the IRS decides to reward you as the whistleblower.
Among other things, you may use Form 3949-A to report the following:
- False Exemptions or Deductions
- False/Altered Document
- Failure to Pay Tax
- Unreported Income
- Organized Crime
- Failure to deduct Withholding taxes
But not all transgressions of tax law should be reported using Form 3949-A. You should not use 3949-A when it is a case of:
- Identity theft
- Fraudulent activity by a tax preparer
- An unauthorized change made to your tax return by a tax preparer
- Abusive tax promotion
- Wrongdoing by an organization exempted from tax
- A piece of information for which you seek a reward
- Phishing activity by persons or organizations impersonating the IRS
For more information on Form 3949-A, check out the IRS website at www.irs.gov.