|
|
|
|
|
|
Tax Fraud
Not withholding Federal income taxes for yourself or Employees can get you in a lot of trouble
Illegal schemes arguing that employers don't have to withhold federal income tax or
employment taxes from employees' wages continue to crop up nationwide. These scams
rely on an interpretation of tax law that wages are not a "source" of income and
that the definition of "sources of income" does not apply to individuals. Scam operators
usually cite Section 861 of the tax code as the basis for their non-withholding claims.
The IRS categorically rejects such arguments. Since 2001, the Justice Department has stepped
up pursuit of similar cases in both the civil and criminal courts. Convicted tax evaders
usually are ordered to make restitution to the government for the unpaid taxes, as well as
face additional penalties.
Ultimately, you're solely responsible
You are responsible for your own taxes even if your boss decides not to withhold taxes for
you
But tax-protesting bosses aren't the only ones who could face tax consequences. Individual
workers still are ultimately responsible for personal tax payments -- income, Social Security
and Medicare -- even when an employer refuses to withhold them. If these taxes aren't withheld
regularly from paychecks, a taxpayer could face a huge tax bill, plus penalties and interest
for not paying throughout the year as income was earned.
How to Report Suspected Tax Fraud Activity
Suspected tax fraud can be reported to the IRS using IRS Form 3949-A, Information Referral.
Form 3949-A is available for download from the IRS Web site at IRS.gov, or through the U.S.
Mail by calling 1-800-829-3676. The completed form or a letter detailing the alleged fraudulent
activity should be addressed to the Internal Revenue Service, Fresno, CA 93888. The mailing
should include specific information about who is being reported, the activity being reported,
how the activity became known, when the alleged violation took place, the amount of money
involved and any other information that might be helpful in an investigation. The person
filing the report is not required to self-identify, although it is helpful to do so. The
identity of the person filing the report can be kept confidential. The person may also be
entitled to a reward.
Related Tax Fraud Links:
IRS Free Online Filing
The "Dirty Dozen" Tax Scams
Tax Scams - How to Recognize and Avoid Them
|
|
|
|
|
|
|
This site is protected under both U.S. Federal copyright law and international treaties. No part of this site,
including text, layout or images, may be reproduced or copied in any form or by any method.
|
