Julian Drago
October 8, 2025
Reporting a business that doesn’t pay taxes is not only an act of civic responsibility but also a way to protect fair competition. In the United States, the Internal Revenue Service (IRS) provides official channels for reporting companies or individuals who evade their tax obligations.
In this article, you’ll learn how to file a report, which forms to use, what information to include, and what legal implications and rewards may apply for whistleblowers.
When a company fails to pay its taxes, it directly affects the country’s economic system. Taxes fund essential public services such as education, healthcare, and infrastructure.
Tax evasion also creates unfair competition—businesses that comply with the law are put at a disadvantage compared to those trying to avoid their responsibilities.
The IRS treats tax evasion as a serious crime that can lead to fines and, in severe cases, imprisonment. To encourage compliance, the agency operates a Whistleblower Program that protects and rewards individuals who provide reliable information about tax fraud.
The reporting process depends on the type of tax violation detected. In most cases, you should use Form 3949-A (Information Referral), available on the official IRS website.
This form allows you to report suspicious activities such as:
The form can be submitted online or mailed to the following address:
Internal Revenue Service
Fresno, CA 93888
You don’t have to include your name, but doing so may strengthen the credibility of your report. The IRS treats all information with strict confidentiality.
If you have specific, credible, and documented information about a company evading more than $2 million in taxes, you may report it under the IRS Whistleblower Program using Form 211.
This program offers financial rewards ranging from 15% to 30% of the amount recovered by the government as a result of your report.
The IRS Whistleblower Office reviews the evidence, evaluates the case, and ensures confidentiality throughout the process.
Common examples of cases investigated under this program include:
To ensure that the IRS can investigate effectively, your report should include as much detail as possible. Strong reports usually contain:
The more accurate and detailed the information, the higher the likelihood that the IRS will open a formal investigation.
The IRS safeguards the identity of whistleblowers who report tax fraud.
While you must identify yourself to the agency, your name is not disclosed to the business or individual reported.
In limited cases—such as court proceedings—your identity may be revealed, but only under specific legal conditions.
Additionally, U.S. law protects employees and former employees from retaliation for reporting violations, ensuring they cannot be fired or penalized for doing the right thing.
Penalties imposed by the IRS depend on the severity of the violation but may include:
Additional penalties may apply for document falsification, obstruction of audits, or aiding in accounting fraud.
If you own a business in the U.S., the best way to avoid trouble is through transparent and organized tax management.
Complying with tax regulations not only prevents penalties but also builds trust and strengthens your company’s reputation.
Professional support can make all the difference. At Openbiz, we help business owners ensure their companies operate legally and stay compliant with U.S. tax requirements, from company formation to annual reporting.
Where can I report a business that evades taxes?
You can report directly to the IRS using Form 3949-A (for general fraud) or Form 211 (for whistleblower claims that may include a financial reward).
Can I remain anonymous?
Yes. The IRS handles all reports confidentially and protects the whistleblower’s identity by law.
Can I get paid for reporting a business?
Yes. The IRS Whistleblower Program awards between 15% and 30% of the recovered amount in significant tax evasion cases.
What if a business fails to pay taxes by mistake?
The IRS differentiates between unintentional errors and deliberate fraud. If intent to evade is proven, penalties may include fines or imprisonment.
Reporting tax fraud helps maintain a fair and transparent economic system.
But if you are a business owner, the best protection is compliance.
At Openbiz, we help you form and manage your company in the U.S., ensuring full compliance with IRS and state tax authorities.
Contact us today to keep your business secure and compliant.
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