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IRS Whistleblowing – Overview

The Internal Revenue Service (IRS) is the federal governmental body responsible for collecting taxes from individual citizens as well as companies. Failing to pay taxes, criminally misreporting your wages or conducting other acts of tax fraud are serious crimes that can result in heavy fines and jail time.

The IRS also contains an office that deals entirely with assisting whistleblowers – essentially any person or persons who help bring an act of tax fraud or tax evasion to the attention of the IRS – in bringing charges against individual offenders of tax law.

Being a whistleblower for the IRS can be an incredibly lucrative endeavor, as well as a just thing to do, since the people getting the whistle blown on them are almost certainly in clear, knowing violation of the law. A whistleblower can be awarded up to 30 percent of the additional taxes, penalties and other amounts collected by the IRS as a result of the crime coming to light.

Since 2007, when the IRS Whistleblower Office was enacted, whistleblowers have helped the IRS collect $3.4 billion in revenue and have been subsequently rewarded to a tune of over $465 million collectively. Just in 2016, whistleblowers were awarded 418 times totaling over $61 million. This is a 322 percent increase from the 99 total awards paid in 2015.

This is not to say that whistleblowing is a simple or sure-thing process. For some perspective, in 2016 the IRS rejected 12,395 whistleblowing claims that were considered “not specific, credible, or are speculative in nature.” Additionally, the IRS Whistleblower Office states they are seeking to create more protections for whistleblowers, as “whistleblowers may be putting their careers at risk by coming forward…”

Due to the large amount of resources dedicated to filing through whistleblowing claims that turn out to be bogus, the IRS Whistleblowing Office is also seeking to enact a sanction against individuals who “improperly disclose taxpayer information obtained from the IRS in connection with their whistleblower claim.”

To be an IRS whistleblower

For a case to be considered by the IRS Whistleblowing Office, all information submitted by the whistleblower:

  • Must be signed and submitted under the threat of perjury
  • Relate to an action in which the tax, penalties, interest, additions to tax and additional amounts in dispute exceed $2,000,000
  • Relate to a taxpayer, and for individual taxpayers only, one whose gross income exceeds $200,000 for at least one of the tax years in question

If your whistleblowing leads to penalties enacted by the IRS, you are entitled to at least 15 percent, but not more than 30 percent, of those proceeds.

At Altman & Altman LLP, we have the dedication and experience to help go over these types of cases and provide guidance as you navigate a whistleblowing claim.  Call us for a free consultation today at 617-492-3000 or toll-free at 800-481-6199. We are available 24/7.