February 2016

Tax Controversy Alert: IRS releases annual report on Whistleblower Program – 2015 was “a big year” for awards under the Program


The IRS Whistleblower Office recently issued its report to Congress on the IRS Whistleblower Program’s results for the 2015 fiscal year.

The IRS Whistleblower Program exists under the authority of Internal Revenue Code Section 7623.  Under this statute, the IRS is generally required to pay awards to individuals who provide information to the IRS which substantially contributes to the collection of tax, penalties, interest and other amounts when the amounts at issue are greater than $2,000,000.  Awards are based upon the extent to which the whistleblower substantially contributes to the IRS’s recovery of funds and can range from 15 to 30% of the collected proceeds.  The IRS may make lower awards of up to 10% of collected proceeds in cases involving less substantial contribution.  The IRS also has an award program for individuals who do not meet the dollar thresholds set forth in Section 7623.

In its report, the IRS noted that “FY 2015 was a big year for awards under the Program, with 99 awards made to whistleblowers totaling more than $103 million.”  The report further notes that since 2007 the IRS has awarded more than $403 million to whistleblowers.

IRS whistleblower claims are made by filing IRS Form 211 with the IRS Whistleblower Office.  Many claims are rejected because they do not present a tax issue or do not present clear, specific allegations.  Well-documented and thorough claims clearly presenting a tax issue are more likely to result in awards.  A whistleblower may seek review of an IRS determination regarding an award in the U.S. Tax Court in the event of a dispute.

Please contact Steve Katz, Emily Kingston or Jay Weill if you need representation by one of our tax controversy attorneys in pursuing an IRS whistleblower award or if you have questions regarding the IRS Whistleblower Program.