There are numerous state and federal programs that reward and protect whistleblowers who report tax fraud to the government. The most well known is the IRS Whistleblower Program. But there are also state whistleblower programs – most notably in New York and Illinois – that reward those who report tax violations to the government.
There are a wide variety of different federal and state taxes, ranging from the most common sales and income taxes, to a long list of item-specific use taxes and tariffs. Similarly, there are an equal number of tax schemes used to avoid incurring or paying those taxes. Numerous government programs exist to encourage, reward and protect individuals who step forward to report such violations to the government.
Tax avoidance schemes are rarely accomplished without the help of others. They usually involve facilitators such as an accountant who keeps a “second set of books.” Those in a position to know that a tax violation is taking place (or has occurred) can use these whistleblower programs to not only recover much needed revenue on behalf of the tax paying public, but also receive a financial reward for doing so.