The following is direct from the IRS to Tax Professionals around the country. They are asking tax preparers to turn in their clients for a reward. It is from Headliner Volume 193 dated March 1, 2007. "During the filing season buzz of preparing returns and talking with clients or potential clients, you may encounter individuals or companies that are not complying with the tax laws. The IRS is committed to increasing compliance and encourages you to report noncompliant taxpayers by completing IRS Form 3949-A or writing a letter and mailing the information to: Internal Revenue Service, Fresno, California 93888. Although not all inclusive, activities in violation of the tax laws include: • Deliberately underreporting or omitting income. • Overstating deductions. • Keeping multiple sets of books. • Making false entries in books and records. • Claiming personal expenses as business expenses. • Claiming false deductions. • Hiding or transferring assets or income. If you choose to send a letter instead of Form 3949-A, include the following information, if available: • 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). • A brief description of the alleged violation, including how you became aware of or obtained the information. • The years involved. • The estimated dollar amount of any unreported income. • Your name, address, and daytime telephone number. You are not required to identify yourself when reporting suspected tax fraud activity; but, it is helpful to do so. Keep in mind that your identity can be kept confidential, and you may be entitled to a reward." Look at the activites listed above. Do you do any of them? Do you ever put cash in your pocket instead of the register? Ever report an expense, as business when you really knew it was personal? Ever claim personal miles in your business log? Ever restructure your business to report less income for child support purposes? Ever take less reportable income and take perks on the side to qualify for income levels for a government program. Ever not report cash income from a hobby business? Now, have you ever told anyone? Your wife? An employee? Your lawyer? How about your accountant? Does your taxpreparer know, or even suspect? If you are not following the law you need to be aware that the IRS is offering to pay people to turn you in and you will never know who did it. Ex-wives are the biggest source of tips on tax cheats followed by ex-employees. If you are cheating, anyone, anywhere that finds out can turn you in for cash. It may take the IRS several years to get around to you but they never forget. However by the same token the competitor of yours who pays contact labor instead of payroll, or who deliberately over reports his expenses, or brags about the cash he receives and does not report. Here is your chance to level the playing field.
Charles J. Read, CPA has been in the payroll, accounting and tax business for 30 years, the last fifteen in private practice.
Mr. Read is the author of “How to Start a New Business.”
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See an excerpt of Mr. Read’s interviews from William Shatners “Heartbeat of America” television show on the web sites linked above.
