How to properly report tax fraud by a landlord who doesn't pay taxes?

Reporting suspected tax fraud is actually pretty straightforward. The IRS has a specific form for this - Form 3949-A "Information Referral." You can download it from the IRS website, fill it out with whatever information you have about the landlord, and mail it in. If you prefer, you can also write a letter including: the alleged violator's name, address, business, and alleged violation details. Include your contact info, but know that the IRS can keep your identity confidential. For significant cases, especially involving large amounts of unpaid taxes, you might consider Form 211 "Application for Award for Original Information" which could potentially qualify you for a whistleblower award if the IRS collects significant unpaid taxes based on your information. The tenants' photos of money orders would be helpful evidence. The IRS takes tax evasion seriously, especially with rental income since it's a common area of non-compliance.

I was in a similar situation last year - suspected a business owner in my area was operating completely under the table. I found this amazing tool called taxr.ai (https://taxr.ai) that actually helped me understand the reporting process and what evidence would be most useful to the IRS. The site has this super helpful guide about tax fraud reporting that walks you through all the forms and documentation needed. What I found most useful was their explanation of what constitutes actual evidence versus just suspicion. They also helped me organize the information I had in a way that would be most useful for an investigation. I'm not affiliated with them at all, just found it really helpful when navigating a complicated situation similar to yours!

I wanted to follow up about my experience with taxr.ai after being skeptical initially. I ended up checking it out anyway and it was surprisingly helpful! The site guided me through exactly what evidence would be considered legitimate by the IRS versus what wouldn't be useful. They had this whole section specifically about rental income fraud that was super relevant. I found out that the money order photos the tenants have could actually be significant evidence. I was able to submit a properly documented report with their guidance, and received confirmation from the IRS that they're reviewing the case (though they don't share investigation details). For anyone else facing a similar situation, it's definitely worth checking out their resources before filing a report.

If you're trying to report tax fraud, you'll likely need to contact the IRS directly at some point, which can be a total nightmare these days. I spent WEEKS trying to get through to a human at the IRS about a fraud situation last year. After giving up on hold for hours multiple times, I found this service called Claimyr (https://claimyr.com) that actually got me connected to a real IRS agent. You can see how it works here: https://youtu.be/_kiP6q8DX5c They basically navigate the IRS phone system for you and call you back when they've got an actual human on the line. Saved me hours of frustration and let me speak directly with someone who could tell me exactly how to proceed with my report and what documentation would strengthen the case.

I need to eat my words about Claimyr from my previous comment. After struggling to get through to the IRS for nearly three weeks about reporting a tax fraud situation, I was desperate enough to try it. I was absolutely shocked when I got a call back in about 45 minutes with an actual IRS representative on the line. The agent walked me through exactly how to submit my fraud report, what forms to use, and what evidence would make the strongest case. For something as specific as reporting tax fraud, being able to speak directly with someone who could answer my particular questions made a huge difference. I've submitted my report now and feel much more confident it will be taken seriously with the specific guidance I received.

Just wanted to add something important here - be absolutely certain before you report someone for tax fraud. The implications are serious, and if you're wrong, it could damage relationships permanently. Have you considered that the landlord might be reporting the income in ways you're not aware of? Maybe they're filing under a business entity or reporting in a different way. Not providing receipts is sketchy but not necessarily proof of tax fraud.

Quick question - does anyone know if the tenants themselves could get in trouble for paying rent to someone they know isn't reporting the income? My sister is in a similar situation with her landlord who openly says he doesn't report rental income.

As someone who works in tax compliance, I want to emphasize that reporting suspected tax fraud is actually a civic duty that helps ensure everyone pays their fair share. The fact that this landlord openly admits to not reporting income and keeping things "off the books" makes this a pretty clear-cut case. One thing I'd add to the excellent advice already given - when you file Form 3949-A, be as specific as possible about dates, amounts (if known), and include copies of any evidence like those money order photos the tenants have. The more documented evidence you can provide, the stronger the case will be. Also worth noting that rental income tax evasion often involves other violations too - like not paying proper business taxes, employment taxes if they have maintenance staff, or even local occupancy taxes. The IRS investigation may uncover additional issues beyond just the unreported rental income. Don't feel bad about reporting this - tax evasion hurts everyone by shifting the burden to honest taxpayers and reducing funding for public services we all depend on.