Unearned income includes investment-type income such as taxable interest, ordinary dividends, and capital gain distributions. You must report on your tax return any social security and Medicare taxes, or railroad retirement taxes that remained uncollected at the end of 2022. Purposeful evasion can even land you in jail, so get your tax situation straightened out as soon as possible, even if you are years behind. Forensic accountants are often called on by individuals whose case is heard in court, or defense attorneys who are seeking discovery on behalf of their client, specific to their cash-only business. Go to IRS.gov/Form1040X for information and updates. If you choose to have someone prepare your tax return, choose that preparer wisely. Know them. name of the taxpayer you are reporting, including any aliases, last four digits of their Social Security Number or Employer Identification Number, taxpayers date of birth or estimated age, information about whether you have already reported the taxpayer to the IRS, short description of when and how you uncovered the violation. Any tips you reported to your employer in 2022 as required (explained under Reporting Tips to Your Employer, earlier) are included in the wages shown in box 1 of your Form W-2. You may have uncollected taxes if your regular pay wasnt enough for your employer to withhold all the taxes you owe and you didnt give your employer enough money to pay the rest of the taxes. Chances are high that the IRS will catch a missing 1099 form. Collect the names of witnesses. The same landlord could soon receive an audit notice from the IRS. Child support refers to court-ordered payments from one parent to another. Direct deposit also avoids the possibility that your check could be lost, stolen, destroyed, or returned undeliverable to the IRS. Cash-only businesses are often retail-type industries. After all, they also receive a copy of your 1099 form, so they know exactly how much you need to pay in taxes. The Online EIN Application (IRS.gov/EIN) helps you get an employer identification number (EIN) at no cost. Access your online account (individual taxpayers only). IRS. These uncollected taxes will be shown on your 2022 Form W-2. To report these taxes, you must file Form 1040, Form 1040-SR, Form 1040-NR, Form 1040-PR, or Form 1040-SS even if you wont otherwise have to file. However, tax season doesnt have to be difficult and there are distinct differences between failing to file your taxes and intentionally concealing your companys assets. You can find information on IRS.gov/MyLanguage if English isnt your native language. Include this amount in your tip diary. A claim with merit gets forwarded to an investigator. IP PINs are six-digit numbers assigned to taxpayers to help prevent the misuse of their SSNs on fraudulent federal income tax returns. There are various types of tax return preparers, including enrolled agents, certified public accountants (CPAs), accountants, and many others who dont have professional credentials. What Documents Do I Need To File My Taxes? Mistakes happen and the government wont punish you for this. If you sell merchandise online using sites like eBay or Amazon, selling over $20,000 in goods will generate a 1099-K form reporting the dollar amount of your transactions through third parties. You can avoid this penalty if you can show reasonable cause for not reporting the tips to your employer. If you are a "solopreneur" or freelancer, or you earn contract income for driving, delivering papers or any number of jobs, you must pay taxes on your self-employment income. Not reporting cash income or payments received for contract work can lead to hefty fines and penalties from the Internal Revenue Service on top of the tax bill you owe. An IRS auditor's job is to test the accuracy of a taxpayer's tax return and especially their income sources. The maximum amount of the award is 15% of the amount collected, up to $10 million. However, you must report tips you receive from other employees. However, if your taxes are wrong by design and you intentionally leave off items that should be included, the IRS can look at that action as fraudulent, and a criminal suit can be instituted against you. If you fail to file your taxes on time, you'll likely encounter what's called a Failure to File Penalty. {"smallUrl":"https:\/\/www.wikihow.com\/images\/thumb\/1\/1f\/Turn-Someone-in-to-the-IRS-Step-1-Version-2.jpg\/v4-460px-Turn-Someone-in-to-the-IRS-Step-1-Version-2.jpg","bigUrl":"\/images\/thumb\/1\/1f\/Turn-Someone-in-to-the-IRS-Step-1-Version-2.jpg\/v4-728px-Turn-Someone-in-to-the-IRS-Step-1-Version-2.jpg","smallWidth":460,"smallHeight":345,"bigWidth":728,"bigHeight":546,"licensing":"