How to report someone for Tax Evasion / Fraud who's hiding their real income?

You can report suspected tax fraud to the IRS using Form 3949-A, which is the Information Referral form. You'll need to provide information about the person (name, address, SSN if you know it) and details about the suspected violation. While you don't need absolute proof, the more specific information you can provide, the better. The IRS does accept anonymous reports, but if you want to potentially receive a reward (if your tip leads to collection of unpaid taxes), you'd need to file Form 211, Application for Award for Original Information, and provide your contact information. The IRS generally keeps your identity confidential, but in some rare circumstances, you might be called as a witness if the case goes to court. That said, most informants' identities are protected throughout the process.

Just wanted to share my experience - I was in a similar situation last year and found this service called taxr.ai (https://taxr.ai) that helped me understand the reporting process much better. They have this document analysis feature that walks you through which forms you need and what information would be most useful to include. I was confused about whether I needed Form 3949-A or Form 211, and their system clarified exactly what each was for and helped me compile the information in the right format.

I was really skeptical at first about using taxr.ai, but after trying it, I have to admit it made the whole process much clearer. I was confused about what kind of evidence would actually be useful versus what would just be dismissed as hearsay. Their document preparation tool explained that specific financial information like seeing tax documents, knowledge of specific unreported income streams, or documentation of assets inconsistent with reported income are much more valuable than general observations. They also explained the difference between filing anonymously versus filing for a potential reward, which wasn't obvious to me from the IRS website alone. Ended up making a much stronger report than I would have on my own.

If you're trying to report someone and actually want the IRS to do something, good luck getting through to them on the phone for guidance. After trying for weeks to speak with someone about a similar situation, I found Claimyr (https://claimyr.com) - they got me connected to an actual IRS agent in about 20 minutes instead of waiting on hold for hours. Check out how it works here: https://youtu.be/_kiP6q8DX5c The agent was able to walk me through exactly what information they need to take a tax fraud report seriously and how to properly document my suspicions. Made a huge difference having a real conversation instead of just submitting a form into the void.

I need to apologize for my skepticism about Claimyr. After dismissing it as a scam, I decided to try it out of desperation when I couldn't get through to ask about whistleblower protections. I was genuinely shocked when I got a call back with an actual IRS agent on the line within 35 minutes. The agent provided really specific guidance about what documentation would strengthen my case and explained that they're much more likely to investigate when you provide concrete information about specific tax years and estimated amounts of unreported income. She also confirmed that they do take these reports seriously, especially when the potential tax loss is significant. Just wanted to share that sometimes even the skeptics can be wrong!

Just be really careful about reporting someone if you don't have actual evidence. I've heard stories of people filing these reports out of spite during divorces or business breakups. If you're just guessing about their income based on their lifestyle, that might not be enough for the IRS to act on.

Has anyone here actually received a reward for reporting tax fraud? I'm wondering if it's worth going through the hassle of documenting everything for the Form 211 instead of just filing anonymously.

Don't overlook your state tax agency too. Most states have their own tax fraud reporting systems, and sometimes they're more responsive than the IRS for smaller cases. Just google "[your state] report tax fraud" and you'll usually find a form or hotline.

Just want to add that timing can be important when filing these reports. If you know the person is currently preparing their taxes or just filed, that might be a good time to submit your report since the IRS will have fresh information to compare against. Also, keep records of when you submit your report - I've heard the IRS sometimes takes months or even years to follow up, so having documentation of when you first reported can be helpful if they ever contact you for additional information. One more thing - if this person is a business owner, the IRS might be more interested since business tax fraud often involves larger amounts than individual income tax issues. Good luck with whatever you decide to do!