We are being sued by a competing business salon that in complaint filed with court alleges that their "former employees" conspired with us in stealing trade secrets (a.k.a. customer contact list). In reality their former employees are just our tenants and they will give us 1099 form for fixed rents that we collected. We don't share customers or collect commissions.
Now it turns out that the former employer of our current tenants was giving 1099 and not w-2 forms to them. And probably still is giving 1099 to remaining employees. Yet in court document openly calls them "Employees" and not "Independent contractors".
- Is there a chance that IRS may look in such cases?
- What is the proper way to start process?
- Can this tipping be done anonymously?
- Does IRS provide awards to tipsters?
- Anything that can go wrong with this idea?
P.S. I am not looking for legal advice.