Before You Reveal Your Boss Is a Tax Fraud, Consider This:

Question:

My employer keeps two sets of books. One makes it appear that she’s a small business owner, struggling to survive.

The other, kept on a small second computer, shows the actual story. I only figured this because she hired me to clean the offices in the evenings. I stumbled across the truth one night when I overheard a conversation. What she said made me curious. She begs employees to work for next to nothing because she’s not turning a profit, but she’s a millionaire.

I wouldn’t have done anything more except the next week I saw a second computer on her desk that I hadn’t seen before. When she went to the restroom, I went into her office. The few minutes gave me enough time to check out several screens. The categories were our company’s; the figures showed a huge profit.

She’s used me and she’s a tax cheat. I want to report her. I want to report her to the IRS, but she’s well-connected and vindictive. She wouldn’t hesitate to fire me and make it difficult for me to get another job.

Answer:

Your boss would first have to find out that you reported her. The Internal Revenue Service accepts whistleblower tips and protects the identity of those who alert them to tax fraud. If the IRS collects more than $2 million from your employer based on your whistleblowing, you may receive an award of 10 to 30 percent of what they recover.

I’d suggest you find an attorney who can advise you. The methods you use to when gathering confidential employer business information to support a tax fraud claim can expose you to legal liability or weaken a potential retaliation claim if your boss fires or otherwise comes after you.

Your attorney may ask questions such as: Does your employer have policies related to proprietary business information confidentiality? Do you ordinarily have access to both sets of your employer’s books?

Does your employer have a policy against photos and videos? Did you violate that policy when taking cellphone screen shots of documents?

How sure are you of what you know? Could your boss’s net worth stem from non-business endeavors?

Problem answers to these questions don’t mean you can’t gather what you need and pursue whistleblowing. For example, even if your employer has a policy against taking photos or videos on-site, the National Labor Relations Board’s general counsel has stated that employer rules prohibiting “taking unauthorized pictures or video on company property” may be unlawful because they could prohibit valid attempts to document protected concerted activity.

Problem answers mean you need legal advice as whistleblowing moves you into legal territory and you don’t want to undercut your own case or expose yourself to counter-charges.

Your attorney may also urge you to remain employed. Most government agencies operating whistleblower incentive programs prefer whistleblowers remain employed, as s/he can be a “source on the ground” and communicate about their employer’s continuing illegal activities, and provide information concerning where evidence is located or being moved to.

Also, don’t give your boss a reason to fire you. Even though you can sue alleging a retaliatory firing, if your boss counters she fired you because of performance problems, poor behavior or insubordination, it weakens your likelihood of prevailing.

If you get fired, swiftly reach out to the IRS. You don’t want to blow the whistle outside the statute of limitations that protects you, and this varies between regulatory agencies.

Although negative references can damage your job-landing prospects, I can’t imagine a boss so well-connected that she could stop you from getting a job if you have great references from other employers. If she does, you can sue her for retaliation, and may have a good chance of winning, as reporting tax fraud is a protected activity.

© 2020, Lynne Curry

Lynne Curry, Ph.D., SPHR, is the author of “Beating the Workplace Bully” (AMACOM, 2016, https://amzn.to/30V5JO6) and “Solutions”, https://amzn.to/2GYlnAN (both books are rated 4.8 out of 5 stars on Amazon.com). Send your questions to her at https://workplacecoachblog.com/ask-a-coach/ or follow her on twitter @lynnecurry10. www.workplacecoachblog.com.

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