Will My Wrong Tax Return Be Flagged by the IRS and Possibly Charge me Criminally?
As not that many people know, many people and companies work in the business of bringing whistleblower case to the IRS and getting paid well doing it.
People always need extra money and significantly extra big money. There is never enough money, no matter how much you have.
Why can others cheat the system while you pay taxes from your hard-earned money and have less left after taxes?
Some people can get triggered by this unfair course of events. They think this is very unfair. They MAY whistleblow this to the IRS and get paid well for it.
The government is reviewing many many cases brought by the whistleblowers daily.
The average case takes years to complete. People and companies in the business of blowing the whistle know this very well. They don’t mind waiting for several years.
More information about the reward that the whistleblower gets found here: https://www.irs.gov/compliance/whistleblower-informant-award
The IRS has two programs for the most part. The IRS says that “If the taxes, penalties, interest, and other amounts in dispute exceed $2 million, and a few other qualifications are met, the IRS will pay 15 percent to 30 percent of the amount collected. If the case deals with an individual, his or her annual gross income must be more than $200,000”. The whistleblower also has the right to appeal to the Tax Court if they disagree with the outcome of their whistleblower claim. IRC Section 7623(b). If a whistleblower decides to submit information and seek an award, they use IRS Form 211.
Many whistleblowers don’t use their own names to bring the case to the IRS. They go to someone who will bring the case to the IRS for them. Of course, the whistleblowers want to be anonymous! They don’t want anyone to know who blew the whistle. The other thing is that the people/ companies who do bring the case to the IRS for the whistleblower have years and years of experience. They will actually complete their claims successfully and will recover a good reward amount.
Small business owners often think, “I’m not big enough for the IRS to bother.” A lot of times, small businesses are much easier for the IRS to deal with. Small companies don’t have high paid tax & criminal lawyers to protect them. Also, the IRS likes to make an example of small businesses. Why? There are way more small businesses than bigger ones.
What about the consequences of violation of client confidentiality a whistleblower may ask themselves? A lawyer can’t do it to their client, of course. A CPA & EA can’t do it too in some cases. Violation of client confidentiality can cause disbarment or loss of their license. Although, a tax loss can be criminal and then client confidentiality doesn’t apply. The attorney-client privilege protects communications between clients and representing lawyers/CPA/EA. But a client’s communication to their attorney/CPA/EA isn’t privileged if the taxpayer made it to commit or cover up a crime or fraud. CPAs and EAs will not be advising any client to break the tax law and file frivolous tax returns (most CPAs and EAs).
During 2018 the IRS collected $1,441,255,859 from the whistleblower cases https://www.irs.gov/pub/whistleblower/fy19_wo_annual_report_final.pdf
The whistleblower remains confidential during most of the whistleblowing procedures.