How to Report Fraud to the IRS and Earn a Reward

To report tax fraud to the IRS, you have two options: file Form 3949-A if you just want to pass the information along, or file Form 211 through the IRS Whistleblower Program if you want a share of what the government collects. Form 3949-A can be submitted anonymously and asks for basic details about the person or business and what they did. Form 211 requires you to identify yourself and sign under penalty of perjury, but if the disputed tax exceeds $2 million it triggers a mandatory award of 15 to 30 percent of what the IRS ultimately collects.

What the IRS Treats as Fraud

The agency separates honest mistakes from deliberate cheating. A math error or a misunderstood deduction is not fraud. What the IRS investigates is intentional conduct: hiding income, claiming deductions that don’t exist, using fake documents, keeping money in undisclosed offshore accounts, or participating in abusive tax shelters. The person knew what they were doing was wrong and did it anyway to shrink their tax bill.

Older schemes are still worth reporting. When a return is fraudulent or a taxpayer willfully tried to dodge tax, the usual three-year audit clock never starts, and the IRS can assess additional tax at any time.¹

What to Gather Before You File

The quality of a tip decides whether the IRS acts on it. A vague accusation almost never leads anywhere. Before submitting either form, pull together as much of the following as you can:

The legal name and current address of the person or business.
A Taxpayer Identification Number if you have one. A Social Security number or Employer Identification Number lets the IRS match your tip to existing records immediately. If you don’t have the TIN, use identifying details like date of birth or business name.
The specific tax years involved.
A clear description of how the fraud works. “Hiding cash income from a side business” is far more useful than “cheating on taxes.”
Your connection to the information. Former employee, business partner, family member with access to the books — the IRS weighs credibility partly on your access.
Supporting documents you have or can get: internal emails, bank records, invoices, contracts.

Walk through the scheme step by step in chronological order so an IRS analyst can quickly judge whether the lead is worth pursuing. A clear narrative beats a pile of unsorted paperwork.

Filing Form 3949-A Anonymously

Form 3949-A, Information Referral, is the simplest way to report a suspected tax violation by an individual or business.² The form walks you through who you’re reporting, what they did, and what evidence you have.

You can fill out and submit Form 3949-A online through the IRS website, or print it and mail it to Internal Revenue Service, PO Box 3801, Ogden, UT 84409.³ You can stay completely anonymous; the IRS accepts the information either way. The tradeoff is that you won’t receive updates. The IRS doesn’t disclose whether it opened an investigation, and you won’t get any portion of what it collects.

When a Different Form Applies

Not every situation runs through Form 3949-A. A few common ones use their own channels:

A tax preparer filed returns without authorization, inflated deductions, or otherwise acted dishonestly: use Form 14157, Return Preparer Complaint. If the preparer altered or filed a fraudulent return on your behalf, submit Form 14157-A alongside it.⁴
Someone is promoting abusive tax schemes, bogus shelters, or social-media tax hacks: use Form 14242, Report Suspected Abusive Tax Promotions or Preparers, submitted online or mailed to the IRS Lead Development Center.⁵
Someone used your personal information to file a fraudulent return in your name: that’s identity theft. Submit Form 14039, Identity Theft Affidavit, online, by fax, or by mail. If the fraud blocked you from e-filing, attach the completed Form 14039 to your paper return.⁶

Filing Form 211 for a Reward

The Whistleblower Program is for people who have specific, credible information about significant tax cheating and want to be paid if the IRS collects. It runs on different rules than an anonymous tip. You must identify yourself, sign under penalty of perjury, and provide enough detail for the IRS to act. In return, you may receive a percentage of what the government collects.⁷

The $2 Million Threshold

The statute creates two tiers. For a mandatory award with guaranteed minimum percentages, two conditions must be met: the total amount in dispute (tax, penalties, and interest combined) must exceed $2 million, and if the target is an individual rather than a business, that person’s gross income must exceed $200,000 in at least one of the relevant tax years.⁷

If your tip doesn’t clear those thresholds, the IRS can still accept it and pay a discretionary award. There’s no guaranteed minimum and no set percentage, and discretionary awards tend to be substantially smaller.

How to File

All whistleblower claims use Form 211, Application for Award for Original Information. As of late 2025, the Whistleblower Office accepts Form 211 through a secure online portal, which is the preferred method.⁸ You can also download and mail the form.⁹

Form 211 is considerably more demanding than Form 3949-A. It asks for a detailed narrative, supporting documents, and an explanation of how you obtained the information. Many whistleblowers hire a tax attorney or accountant to help prepare the submission. Anonymity is not an option; your identity and signature are required.

After submission, the Whistleblower Office screens the claim and, if warranted, refers it to an IRS examination or criminal investigation team. The Whistleblower Office itself doesn’t investigate. It acts as a go-between, managing communication with you while the investigation runs separately.

Award Percentages and the Public-Information Cap

For claims meeting the mandatory thresholds, the whistleblower receives 15 to 30 percent of total collected proceeds, including taxes, penalties, and interest. The exact percentage depends on how much the whistleblower contributed to the outcome.⁷ On a $10 million recovery, that’s between $1.5 million and $3 million.

One situation drops the maximum. If the Whistleblower Office determines the IRS action was based primarily on information already publicly available through court proceedings, government reports, audits, or media coverage, the ceiling falls to 10 percent of collected proceeds.⁷ Your information is most valuable when the IRS couldn’t have gotten it any other way.

No award is paid until the target taxpayer’s appeal rights are exhausted and the collected revenue is secured by the Treasury.

Expect a Long Wait

Whistleblower claims are not resolved in months. The average time from filing to payment has historically exceeded nine years for discretionary claims and nearly eleven years for mandatory-threshold claims. The IRS must complete its investigation, pursue collection, and wait for all appeal rights to expire before calculating an award. Tax Court litigation stretches the timeline further.

If You Were Involved in the Fraud

Whistleblowers sometimes know about the fraud because they took part in it. The Whistleblower Office can reduce the award based on how involved you were:¹⁰

Moderate involvement: award percentage reduced by up to 33 percent.
Significant involvement: reduced by 34 to 66 percent.
Primary planner: reduced by 67 to 100 percent.

If you’re convicted of a crime arising from your role in planning and initiating the fraud, the office will deny any award entirely, regardless of how helpful your information was.¹¹ A junior employee following orders or performing mechanical tasks at a supervisor’s direction generally won’t be treated as having initiated the scheme.¹⁰

Taxes on the Award

Whistleblower awards are taxable income. The IRS withholds federal income tax at 24 percent on awards exceeding $10,000 paid to U.S. citizens and resident aliens, and you’ll receive a Form 1099-MISC for the payment year.¹¹ Before you see the money, the Whistleblower Office first applies the award against any outstanding federal tax debts, child support obligations, and other federal and state debts you owe.

Confidentiality and Retaliation Protections

Federal law requires the IRS to keep taxpayer information confidential, and the agency extends that protection to the identity of people who submit tips, so long as the case stays at the administrative level.¹² If the case moves to court, discovery rules and trial procedures can require disclosure, and the IRS cannot guarantee your anonymity in a judicial proceeding.

For whistleblowers who filed under the formal program, federal law prohibits employer retaliation. An employer cannot fire, demote, suspend, threaten, harass, or otherwise discriminate against an employee for providing information to the IRS about a potential tax violation or participating in an investigation. Remedies include reinstatement with the same seniority, double back pay plus lost benefits with interest, and compensation for special damages including attorney fees.¹³

Retaliation complaints go to OSHA and must be filed within 180 days of the retaliatory act, either at a local OSHA office or online.¹⁴ Miss the window and you can forfeit the claim.

Filing a False Report Is a Crime

Knowingly submitting fabricated information to a federal agency is a crime punishable by up to five years in prison.¹⁵ This applies whether you file Form 3949-A or Form 211. Whistleblower claims carry additional exposure because you sign under penalty of perjury, which reaches any material misstatement. These reporting channels are built for people with genuine knowledge; using them to harass someone or settle a grudge can end in prosecution rather than a reward.

1
Office of the Law Revision Counsel. 26 U.S. Code 6501 – Limitations on Assessment and Collection
2
Internal Revenue Service. About Form 3949-A, Information Referral
3
Internal Revenue Service. Form 3949-A, Information Referral
4
Internal Revenue Service. Make a Complaint About a Tax Return Preparer
5
Internal Revenue Service. Abusive Tax Schemes and Abusive Tax Return Preparers – IRS Lead Development Center
6
Internal Revenue Service. Identity Theft Guide for Individuals
7
Office of the Law Revision Counsel. 26 USC 7623 – Expenses of Detection of Underpayments and Fraud, Etc.
8
Internal Revenue Service. Whistleblower Office Announces New Digital Form 211
9
Internal Revenue Service. Submit a Whistleblower Claim for Award
10
eCFR. 26 CFR 301.7623-4 – Amount and Payment of Award
11
Internal Revenue Service. 25.2.2 Whistleblower Awards
12
Office of the Law Revision Counsel. 26 USC 6103 – Confidentiality and Disclosure of Returns and Return Information
13
Whistleblower Protection Program. Taxpayer First Act (TFA)
14
Federal Register. Procedures for the Handling of Retaliation Complaints Under the Taxpayer First Act (TFA)
15
Office of the Law Revision Counsel. 18 U.S. Code 1001 – Statements or Entries Generally