I work for the IRS. Every day I see accounts that, because of my training, I can easily see are involved in fraud. I also get taxpayers & preparers who admit to me over the phone that the SSN they are using was bought, stolen, etc. You think there would be a way for me to report this to someone in my agency, wouldn't you? You would be wrong.
I have been told that I can submit a 3949-A, an Information Referral form, as can any American citizen to report fraud. A form that sits on someone's desk for who knows how long before it gets investigated. This is just inexcusable. The employees should be the front line of defense against tax fraud. Instead, I'm told not to worry about it, Exam will catch them sooner or later.
I don't want to wait for sooner or later. I want to be able to do something about the tax cheats who make things harder for the rest of us. I pay my taxes. They should too. We should have a procedure in place to report tax fraud, instead of paying out a refund to someone in jail, or someone who has been dead two years, or an illegal alien who has admitted to you that they bought the SSN they are using. Why should we pay out these refunds in the first place, and then a year or two later do an examination and demand them back? If somebody is doing something illegal in the first place, what makes you think they will ever pay it back? Give IRS employees a way to report tax fraud.