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If I report an individual who does not comply with the tax…

Customer Question
If I report an individual...
If I report an individual who does not comply with the tax law and who hid over
half million dollas ( about $ 600,000 ) in the safety box in his home,
what kind of benefit do I get ?
Submitted: 8 years ago.Category: Tax
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Answered in 26 minutes by:
6/16/2010
Tax Professional: JKCPA, CPA replied 8 years ago
JKCPA
JKCPA, CPA
Category: Tax
Satisfied Customers: 5,884
Experience: CPA with tax experience.
Verified

Hello,

Thanks for your question.

 

Keeping money at home in itself is not illegal but if you have solid information that this person does not report income to the IRS, you can seek a whistleblower award. You'll need to provide specific and credible information to the IRS. If the information results in the collection of taxes, penalties, interest or other amounts, you may be eligible for an award.

 

The IRS looks for solid information, not an "educated guess" or unsupported speculation. They also are looking for a significant Federal tax issue - this is not a program for resolving personal problems or disputes about a business relationship.

There are two types of awards: 1) If the collected amounts exceed $2 million, and a few other qualifications are met, the IRS will pay 15%-30% of the amount collected. If the case deals with an individual, their annual gross income must be more than $200,000. If the whistleblower disagrees with the outcome of the claim, he or she can appeal to the Tax Court.

2) The other type of award is generally for collected amounts that do not meet the dollar criteria of the first type of award. The awards through this program are less, with a maximum award of 15% up to $10 million. In addition, the awards are discretionary and the informant cannot dispute the outcome in Tax Court.

If you decide to submit information and seek an award for doing so, use IRS Form 211. The same form is used for both award programs. For more information, see http://www.irs.gov/compliance/article/0,,id=180171,00.html

Best regards,

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Customer reply replied 8 years ago

That amount is $600,000.

The amount is the income that taxpayer does not pay tax.

They do not have job,but they bought the house and the nice sports car.

Can I get award?

Tax Professional: JKCPA, CPA replied 8 years ago

It would not be possible to calculate the exact award without knowing more specific information like the taxpayer's other income. I can give you an estimate of the maximum award.

 

Let's say the whole $600,000 was un-reported and is taxable income. The IRS collects $200,000 due to your information. The maximum award would be 15% of $200,000 = $30,000. The actual amount could range from $0 - $30,000 since it is a discretionary award. This means it is up to the IRS to decide to approve your award and set the amount of the award. You'd have to go through the whole process of filing a whistleblower award and having it approved by the IRS in order to get an award.

 

Hope this helps!

 



Edited by JK_CPA on 6/17/2010 at 12:20 AM EST
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