Posted by Jack Tri on 10/10/08 3:20pm
Msg #266931

Report All no pay signing companies Whistleblower - Informan

The IRS Whistleblower Office pays money to people who blow the whistle on persons who fail to pay the tax that they owe. If the IRS uses information provided by the whistleblower, it can award the whistleblower up to 30 percent of the additional tax, penalty and other amounts it collects.

Who can get an award?

The IRS may pay awards to people who provide specific and credible information to the IRS if the information results in the collection of taxes, penalties, interest or other amounts from the noncompliant taxpayer.

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

What are the rules for getting an award?

The law provides for two types of awards. If the taxes, penalties, interest and other amounts in dispute exceed $2 million, and a few other qualifications are met, the IRS will pay 15 percent to 30 percent of the amount collected. If the case deals with an individual, his or her 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. These rules are found at Internal Revenue Code IRC Section 7623(b) - Whistleblower Rules.

The IRS also has an award program for other whistleblowers - generally those who do not meet the dollar thresholds of $2 million in dispute or cases involving individual taxpayers with gross income of less that $200,000. The awards through this program are less, with a maximum award of 15 percent up to $10 million. In addition, the awards are discretionary and the informant cannot dispute the outcome of the claim in Tax Court. The rules for these cases are found at Internal Revenue Code IRC Section 7623(a) - Informant Claims Program, and some of the rules are different from those that apply to cases involving more than $2 million.

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.

More Information

What Happens to a Claim for an Informant Award (Whistleblower)
Procedures used and the criteria followed to identify and process informant cases

History of the Whistleblower/Informant Program
Historical information on the evolution of the concept of paying for leads from its inception up to the current law followed today

Whistleblower Law
A brief synopsis of what the new whistleblower law entails. This is the most significant change to the Services’ approach to informant awards in 140 years

How Do You File a Whistleblower Award Claim
Step by step procedures to follow to file an informant claim for award

Confidentiality and Disclosure for Whistleblowers
The rules governing confidentiality of informant information

IRC Section 7623(b) - Whistleblower Rules
The requirements of the new rules enacted in IRC Section 7623(b), the Whistleblower Program

IRC Section 7623(a) - Informant Claims Program
The requirement of the rules governing claims that do not meet the requirements of the provisions in the whistleblower program under IRC Section 7623(b). These claims are part of the Informant Claims Program

IRS Form 211
Application for Award for Original Information

News Release IR-2007-201
Procedure Unveiled for Reporting Violations of the Tax Law, Making Reward Claims

Notice 2008-4 Guidance to the public on how to file claims
Claims Submitted to the IRS Whistleblower Office under Section 7623

Whistleblower Office At-a-Glance


2008 Report to Congress on the Whistleblower Program

Reporting other information to the IRS

If you have information about tax noncompliance but are not interested in an award, or you have other information you believe may be of interest to the IRS:

For information on how to Report Suspected Tax Fraud Activity, if you have information about an individual or company you suspect is not complying with the tax law, and you do not want to seek an award . You can remain anonymous
The IRS sets professional standards for attorneys, certified public accountants and enrolled agents who represent taxpayers before the IRS. To learn more about those professional standards, or how to report a violation, see Office of Professional Responsibility At-a-Glance - Report Circular 230 Violations - email [e-mail address]
Report Fraud, Waste and Abuse to Treasury Inspector General for Tax Administration (TIGTA), if you want to report, confidentially, misconduct, waste, fraud, or abuse by an IRS employee or a Tax Professional, you can call 1-800-366-4484 (1-800-877-8339 for TTY/TDD users). You can remain anonymous.

Reply by MikeC/NY on 10/10/08 4:26pm
Msg #266939

Did you even read this before you posted it?

"this is not a program for resolving personal problems or disputes about a business relationship."

What part of that is unclear to you?

Reply by PAW on 10/10/08 6:19pm
Msg #266945

Besides that ...

The beginning of that sentence stated: "We are also looking for a significant Federal tax issue ..."

Not only would non-payment be a business relationship issue, I doubt it would qualify as a "significant" tax issue.

Reply by MikeC/NY on 10/11/08 5:05pm
Msg #267039

Exactly, Paul

Elsewhere in the post it says the IRS is primarily looking for fraud in excess of $2 million - that's a heck of a lot of unpaid signings...

Reply by Notary/Guy on 10/10/08 6:20pm
Msg #266946

Re: Did you even read this before you posted it?

Tell them you are going to report them to the IRS See how fast you will get paid.
How Do You Report Suspected Tax Fraud Activity?

If you suspect or know of an individual or company that is not complying with the tax laws, you may report this activity by completing Form 3949-A. You may fill out Form 3949-A online, print it and mail it to:

Internal Revenue Service
Fresno, CA 93888

If you do not wish to use Form 3949-A, you may send a letter to the address above. Please 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
Although you are not required to identify yourself, it is helpful to do so. Your identity can be kept confidential.


http://www.irs.gov/individuals/article/0,,id=106778,00.html

Reply by MikeC/NY on 10/11/08 5:03pm
Msg #267038

Exactly what tax law are they not complying with?

Not paying your vendors is not a violation of IRS code, as far as I know... You might be able to make a case for theft of services, but that has nothing to do with the IRS.

You can make all the threats you want, but you have to be able to back them up if they call your bluff. I would be willing to bet that complaints like these won't even make the IRS radar screen...

Reply by Marian_in_CA on 10/11/08 5:21pm
Msg #267041

Re: Exactly what tax law are they not complying with?

I think the idea is that the notary is assuming that the company is reporting to the IRS that they paid out on a 1099 to the notary without actually doing it, thus reducing their overall taxes.

The problem with that is that you can't actually prove it unless you, as a the notary are audited and the IRS says, "Hey...what about this 1099?" And the the notary says, "Excuse me? They never paid me."

That's why you need to keep very detailed collection records and copies of all checks sent to you. That way you can prove to the IRS something is hinky if you're audited. if you report a company to the IRS for "non-payment" they'll ignore you. If you report them for fraud, then you need to have evidence of it.

I've had that specifically detailed to me by an accountant who really knows his stuff. He told me that threatening to report to the IRS is a good tactic to get money collected because people are scared of the IRS, but it may not actually work of you DO report them because the IRS doesn't get involved in B2B dealings.

Reply by MikeC/NY on 10/11/08 9:00pm
Msg #267068

Re: Exactly what tax law are they not complying with?

"I think the idea is that the notary is assuming that the company is reporting to the IRS that they paid out on a 1099 to the notary without actually doing it, thus reducing their overall taxes."

I agree, but that's an assumption that may have no basis in fact. The IRS is not going on a fishing expedition based on assumptions - they want proof. And if they DO go fishing, they're looking for much bigger fish to fry than some company who stiffed a notary for a couple hundred bucks...

I'm not arguing with you, Marian - you make some good points, especially about keeping accurate collection records. Some people just seem to buy into these wacky collection ideas when they would be much better off either going to a collection agency or hiring an attorney.

I'm sure you'll agree that a little common sense is in order. Even though the economy is in a tailspin, it took Congress two weeks to pass a $700 billion measure that may or may not pull us out of the nose-dive. The wheels are falling off, the government is in full crisis mode, and yet there are still people here who think the IRS will step up and help them collect on a $150 bad debt. It would be funny if it wasn't so scary...