Income tax frauds are generally categorized into two types -- personal income tax fraud and business income tax fraud.
In the case of business income tax frauds, the owner of the company may use his corporate credit card for expenses related to his family; like paying for family vacations; and then reporting these expenses as valid business related expenses and deducting the same from taxable income.
In case of personal income tax frauds a person, although living in a place in the US does notpay the city's resident personal income tax as he/she may own a summer house at a different place that is used as his/hers tax filing address.
Also there are some cases where someone has filed a tax return by using the social security number of some other individual.
Such serious fraudulent cases have to be reported to the IRS with the help of the guidelines given below: To report an individual or a company not complying with the tax laws, you can download Form 3949-A from the IRS website.
The form has to be filled and sent by US mail service to the IRS.
On the other hand, you can also report an income tax fraud by writing a letter to the IRS.
However, when you write a letter, you need to be very precise with the information you furnish.
You would be required to give the following information in the letter: oName and address of the person committing income tax fraud oThe social security number of the person oA brief description of the fraudulent activity or violation oAn estimate of the amount involved in the tax fraud oYour name, address and telephone number.
This information is usually kept confidential and is not revealed at any time whatsoever.