Although rare, individuals do encounter fact patterns which involve unethical and perhaps unlawful activity resulting in the understatement of income and consequent tax.
On the rare occasion that you become aware of a significant event or action by an individual or business entity that you suspect may result in the understatement of income and the resultant improper reduction of tax liability, the Revenue Service has instituted a “Whistleblower Program.” Essentially, you would make a disclosure to the appropriate office of the Internal Revenue Service, which if acted upon with the required results, could result in a reward being paid for the information.