January 12, 2015 — When employers routinely pay their workers in cash, it may be a sign that they are attempting to avoid the payment of employment taxes. The Tax Relief and Health Care Act of 2006 set up an IRS Whistleblower Office so whistleblowers with information about tax fraud could notify the IRS and receive compensation. The Act allows tipsters to receive a percentage of 15 to 30 percent of the funds recouped by the IRS based on an informant’s unique information. To be eligible for compensation concerning a private individual’s IRS violations, the tax evader’s gross income must exceed $200,000 for every taxable year involved and the government’s recovery must top $2 million. To receive a reward for information about a corporation’s wrongdoing, no minimum recovery is required.
Casper Wyoming Businessman Admits to Claiming False Expense on Tax Returns and to Failure to Pay Employment Taxes
The owner of a Wyoming business, CC Cowboys, has been sentenced to prison for tax fraud. Sonny Pilcher admitted in court that on his 2008 tax return, he claimed credit for a false business expense of $258,000 which purportedly went to repay a loan. In addition, Pilcher admitted to paying his employees in cash to avoid paying employment taxes.
The government established that Pilcher destroyed CC Cowboy’s income records, commingled funds among bank accounts of different businesses and created phony invoices amounting to $3.9 million. In 2007 and 2008, Pilcher took in $750,000 as a result of the phony invoices, yet failed to report the income on tax returns. To prevent the IRS from discovering his income, Pilcher reportedly did not maintain a personal bank account and paid for living expenses with cash.
Employees Notify IRS About Employers’ Tax Fraud
While Waters & Kraus is not handling this particular instance of tax fraud, we are representing whistleblowers with knowledge of similar types of tax scams. Before stepping forward, tipsters should understand how the process works. The IRS tax fraud lawyers with Waters & Kraus provide government collaborators with the legal counsel they deserve. Contact us by email or call our whistleblower attorneys at 855.784.0268 to learn how we can protect your interests. Our qui tam lawyers, like Paul Lawrence in our Washington D.C. area office, are committed to advancing and protecting informants’ interests in whistleblower lawsuits.