How to Report an Illegal Home Business

Written by peyton brookes
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How to Report an Illegal Home Business
Excessive inventory can cause a fire hazard that potentially affects an entire neighbourhood. (Gary Cornhouse/Photodisc/Getty Images)

Home-based businesses drive the economy and provide financial security for their owners, but they can also cause disturbances -- traffic, noise or inventory fire hazards, for example -- that can have an effect on surrounding neighbours. As a result, most cities and other organisations require that home-based businesses comply with several rules, ordinances and laws. Business laws are strictly enforced by a number of entities and if you suspect, with legitimate concern, that a home business is operating illegally, you have several options for reporting the alleged violation.

Skill level:
Moderately Easy

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  1. 1

    Contact the state secretary's office to report businesses operating without a license. Most states require that a business register and perform additional tasks required by law through the secretary's office. For example, a business that operates as a corporation or limited liability company should have the appropriate documentation on file with the state's regulatory office.

  2. 2

    Call the state's department of taxation if you suspect a business of illegally selling taxable goods or services. To illustrate, a business that sells crafts or other products is required to tax items sold within the state and pay into a tax account.

  3. 3

    Call the Internal Revenue Service (IRS) for businesses that evade taxes. Complete form Form 3949-A and include the name of the business, a description of the alleged violation and any additional information.

  4. 4

    Contact the homeowner's association (HOA) for the neighbourhood in which the business operates. Many HOAs have firm rules regarding the operation of businesses in the home.

  5. 5

    Call the professional licensing board for the business' industry. For example, an illegal accounting practice should have licensing through the state's certified public accounting authority. Contact the board and file a report or complaint. The board can take the complaint and issue any necessary disciplinary action, if required.

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