What is Tax Fraud?

GOLDEN, CO, August 28, 2010 (Press-News.org) While no one looks forward to paying taxes, the vast majority of people understand the purpose and importance of taxes. Without this revenue, our government would not have the funds to pay for important programs that benefit all citizens, such as:

- Medicare/Medicaid
- Social Security
- Repairs to infrastructure (roads, bridges, etc.)
- Public schools
- Military defense
- Law enforcement

In order to obtain the necessary revenue to fund these programs, the federal government has established certain guidelines regarding the amount of money individuals and corporations must pay in taxes. When and individual or business enters into an illegal scheme with the intention of avoiding their tax responsibilities, it is considered tax fraud.

Actions Constituting Tax Fraud

There are a variety of actions which individuals and corporations may engage in to avoid paying taxes. Many of these constitute tax fraud, including:

- Failure to file a tax return
- Purposely underreporting or omitting income
- Claiming false deductions
- Hiding or transferring assets or income
- Overstating the amount of deductions
- Making false entries in records
- Failing to report income earned in a stock exchange
- Maintaining two sets of books
- Misusing trusts
- Abusing charitable deductions

In order for an action to be considered fraudulent, the IRS must be able to prove that the individual or corporation willfully engaged in illegal measures with the intention of withholding taxes from the federal government.

The Tax Whistleblower Program

The federal government lacks the time and resources to adequately ferret out and prosecute tax underpayment on their own. Therefore, they rely on the assistance of whistleblowers to help them recover unpaid tax revenue. In order to provide whistleblowers with an incentive to come forward with their information about large scale tax underpayment, the government has created the Tax Whistleblower Program.

Under the Tax Whistleblower Program, informants are eligible to receive between 15% and 30% of all recovered taxes, penalties, and interest in cases where the recovery totals at least $2 million. The percentage of your reward varies based on your contribution to the case.

In order to maximize your tax reward, it is important to work with an experienced law firm specializing in tax whistleblower claims. Your attorney will need to have the skills to help you gather evidence, present your case to the IRS in a compelling way, and assist in the IRS's ongoing investigation.

In order to compel the IRS to pursue your claim, you will need to provide them with:

- Detailed evidence of the tax underpayment;
- Documentation of fraudulent transactions; or
- A solid paper trail

Reporting tax fraud against the government is an important public service. This revenue is important to our government's ability to provide citizens with the important services and protections to which they are entitled. By fighting fraud, you will be helping all Americans.

To learn more about tax fraud, please visit the website of Kenney & McCafferty today at www.tax-fraud.net. Kenney & McCafferty provides representation to tax whistleblowers both nationally and internationally.