The only way you could know this and prove it is if you helped him do his taxes. If so, then you are liable too for helping him to cheat. So, I can't see what you could do really, if you want to stay away from a conviction remain quiet.

If you heard rumors but had no proof, then you would need to think about his character to judge if this is something he is capable of. If you believe it about your boss then perhaps it is time to move to a more trustworthy company.

http://t3.gstatic.com/images?q=tbn:8vtLTD2nBaOAoM:http://farm4.static.flickr.com/3376/3665234115_c91cafb3c0.jpg

I would turn him in to the IRS as fast as I could and hope to get an award as outlined here:

http://www.irs.gov/compliance/article/0,,id=180171,00.html

I would also hope the compan would retaliate and I could collect even more.

At the very least I hope he would be fired and I would be promoted to take his place as I really hate working for crooks.

http://www.youtube.com/watch?v=azcrIEkerNs

I agree with keepon. Note, however, that a whistleblower puts himself in a precarious position vis-a-vis the company. In addition to firing the whistleblower, the company may sue for breach of fiduciary duty. There may also be a cause of action for stealing the information that he provided to the IRS. The IRS does not care where or how he acquired the information, but it might make a big difference in a state court. In addition, the informant may not be able to get another job in the same industry.

In the recent case involving the Swiss banking giant UBS, the IRS recovered a large fine from UBS and stands to collect billions in unpaid taxes from the American account holders who hid their money abroad to evade taxes. The whistleblower, the one who brought all this information to the IRS and cooperated extensively, has been given a 40-month prison sentence for his role in the scheme. Because of his guilty plea, he may not be eligible for the huge whistleblower award from the IRS.

Another thought. Before taking any steps to report the company to the IRS, you might discuss the issues with the boss or even company CEO. You could say that you noticed some "discrepancies" in the books and offer to point them out. If she doesn't take it seriously, then your conscience is clear.

ask for a cut in the proceeds. lol!