What Is Involved in Reporting Tax Evasion?

The methods of reporting tax evasion vary from one jurisdiction to the next. In some areas, citizens may do so by calling a toll-free hotline. Other countries may ask people to fill out a form detailing the specifics of the tax evasion. Individuals could also write a letter to their local revenue agency or report tax fraud on a tax bureau's website. When reporting income tax evasion, it can be helpful to have as much information as possible so investigators can make arrests if necessary.

In many locations, a special telephone number is available for reporting tax evasion. People who call in tips via this hotline can often do so anonymously. Some agencies may offer a reward for citizens who report tax fraud when it leads to an arrest or recovery of revenue funds. This might mean that individuals who would like to be rewarded will have to reveal their identity to authorities. Doing so does not necessarily mean the accused will be given the identity of the tipster.

Some areas require tax fraud to be reported in writing. This may be accomplished by filling out a government form or by submitting information on an agency's website. Both of these methods may be done anonymously, but it is usually easier to keep one's identity confidential when reporting tax evasion via the Internet.

Reporting tax fraud should be done by contacting the revenue agency affected by the issue rather than local law enforcement. Before doing so, citizens should gather as much information as possible about the suspected tax evasion. This can include names and addresses of the parties involved as well as the estimated amount of revenue being deferred. It can also be helpful to know how the crime is being perpetrated and how long the income tax evasion has been happening. If a business is involved, citizens should give the business contact information as well.

Many government agencies do not follow up with tipsters once an investigation has been completed. This may mean that individuals who are reporting tax evasion may not be informed if there is an arrest made as a result. An exception can be whenever a reward is offered or if the informant is needed to testify in court. Tax fraud investigation can sometimes be rather lengthy, so citizens should not be discouraged if it appears there has been no action after a formal complaint has been filed.