Legal Question in Tax Law in Georgia

Reporting former employer to IRS for tax fraud

For the past three years, I worked for a despicable, evil man who routinely treated employees like dirt and ripped off customers without a second thought. He also committed tax fraud on both the state and federal levels on a constant basis. Thankfully, I quit about two months ago.

Over the last five years, he has taken about $550k in 'advances' from the company because he didn't want to pay any payroll tax on them. He just wrote checks to himself without it reflecting in any way on his W2 or 1099 at year end. It was/still is shown as a 'note receivable' on the balance sheet.

He also pays his childcare and housekeeping staff as company employees which amounts to around $90k per year in expenses that aren't actually company expenses. You can't deduct childcare and housekeepers from your taxes, can you?

Do you think the IRS would be interested in this information? Is there anything he could do legally for me turning him in? Does the IRS keep an informant's ID confidential?

Thanks. Seriously, my conscience is killing me over this. And it's time someone brings this SOB down!


Asked on 4/20/06, 9:08 pm

1 Answer from Attorneys
Burton Haynes Burton J. Haynes, P.C.

Re: Reporting former employer to IRS for tax fraud

The IRS Criminal Investigation Division would be quite interested in your information. There are provisions for keeping the source of information confidential, and the IRS even pays a reward based on the quality of the information and the amount ultimately collected from the miscreant. Here's a link to a section of the IRS website that will tell you more about how to present the information to the IRS: http://www.irs.gov/compliance/enforcement/article/0,,id=106778,00.html. Essentially, you fill out a Form 3949-A, or simply prepare a letter with as much information as possible, including the following: (1) name and address of the person you are reporting; the taxpayer identification number (social security number for an individual or employer identification number for a business); (2) a brief description of the alleged violation, including how you became aware of or obtained the information; (3) the tax years involved; the estimated dollar amount of any unreported income; (4) and your name, address and daytime telephone number.

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Answered on 4/21/06, 8:13 am


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