Bankruptcy fraud is the act of falsifying documents and failing to provide financial records to judicial bodies after bankruptcy has been declared. The expense of court services and enforcement of bankruptcy laws is passed down to taxpayers. You can help keep the cost of bankruptcy down by reporting fraudulent actions.
Assist the Internal Revenue Service with a detailed report of bankruptcy fraud relating to business dealings and federal taxes. The IRS is a good resource to begin reporting fraud due to the increased concern of federal investigators with fraudulent activities.
Approach the local branch of your state's revenue service to determine the appropriate way to report bankruptcy fraud. You should deal with state investigators if you encounter an individual that is misusing state welfare and assistance resources while claiming bankruptcy.
Follow the correct procedure to report bankruptcy fraud if you are participating in a bounty program. State agencies concerned about budget issues and misuse of tax resources have begun to offer rewards to citizen reporters. You should pick up forms and determine whether you have sufficient evidence to claim the reward.
Hire an attorney to help you deal with friends, family and business partners who are performing acts of bankruptcy fraud. Your attorney can act as a moderator between you and fraudulent parties to expedite the legal process without interpersonal problems.
Calculate the total amount of money that is being hidden or taken during acts of bankruptcy fraud. You should review bank statements, bankruptcy forms and business inventories to determine the amount of money kept hidden from government agencies. It is important to report an accurate monetary total to assist your case.
Disclose the means you used to obtain information on bankruptcy fraud as part of your report. Investigators cannot accept information gathered illegally from citizens, because this evidence is inadmissible in court.
Create a detailed description of the alleged fraud to demonstrate the legal case against an individual. Your description should feature a chronological account of fraudulent activities dating back to the determination of bankruptcy and background information of each party involved.
Consult with your state's attorney general to determine statutes of limitations for bankruptcy fraud charges. Federal law allows a maximum of 5 years for litigation to be filed against individuals suspected of bankruptcy fraud. The scope of your case may limit the litigation period depending on state bankruptcy laws.
Tips and warnings
- Consult with your state's attorney general to determine statutes of limitations for bankruptcy fraud charges. Federal law allows a maximum of 5 years for litigation to be filed against individuals suspected of bankruptcy fraud. The scope of your case may limit the litigation period depending on state bankruptcy laws.
Things you need
- Copies of bank statements, bankruptcy forms and business inventories