The IRS whistleblower program is designed to allow individuals with information about taxpayer noncompliance to report this information to the IRS. The IRS Whistleblower Office was created in 2006 to encourage people to report instances of tax fraud. The program specifically encourages those with knowledge of underreporting of income, taxation of illegal activities, avoidance of taxes through offshore accounts, and any other form of tax evasion or fraud, to come forward. The program offers confidentiality to whistleblowers and protects them from retaliation. Whistleblowers are also eligible for a monetary award if their information leads to the successful enforcement of tax laws. The award is generally a percentage of the taxes collected because of the information provided, and it can be paid out anonymously if the whistleblower so desires.
The Office has been successful in recouping billions of dollars in unpaid taxes, and it continues to play an important role in combating tax evasion. In 2021, the IRS is expected to have received a record number of tips from whistleblowers. This is largely due to the recent increase in financial crime, as well as the heightened awareness of the Whistleblower Office's existence amongst the general public. The IRS pays out over $1 billion in awards each year, making the program an important part of the agency's efforts to ensure compliance with tax laws.
In the past few years, the IRS has awarded several large sums of money to whistleblowers. Here are the five largest amounts awarded in recent years:
In September 2012, the IRS awarded $104 million to a whistleblower who provided information leading to the discovery of tax fraud.
In August 2013, the IRS awarded $50 million to a whistleblower whose information led to the recovery of unpaid taxes.
In May 2013, the IRS awarded $30 million to a whistleblower who helped uncover an international tax evasion scheme.
In March 2012, the IRS awarded $26 million to a whistleblower whose information led to the discovery of an abusive tax shelter.
In December 2010, the IRS awarded $20 million to a whistleblower whose information helped uncover a scheme to defraud the government.
In 2021, new reforms to the IRS whistleblower program, through the IRS Whistleblower Program Improvement Act of 2021, are supported by whistleblower advocates because these reforms will help to protect whistleblowers and encourage more people to come forward with information about tax fraud. The reforms include creating a standalone office within the IRS to handle whistleblower claims, providing whistleblowers with more information about the status of their claims, and increasing the monetary rewards for successful claims.
Whistleblowers who come forward with information that leads to the collection of taxes owed are eligible for rewards of up to 30% of the amount collected. The minimum awarded is 15%. The act would create new protections for whistleblowers against retaliation by their employers. These changes would encourage more people to come forward with information about possible tax fraud and help the IRS crackdown on those who engage in this illegal activity.
The IRS Whistleblower Program Improvement Act of 2021 is an important step in furthering the mission of combating tax fraud and protecting those who report it. By increasing the potential award for whistleblowers and creating new protections against retaliation, this Act will encourage more people to come forward with information about possible tax fraud. These changes will help to make the IRS whistleblower program more effective in fighting tax fraud and protecting whistleblowers. This will help the IRS crackdown on those who engage in this illegal activity, and ultimately save taxpayers money.
If you have information about an individual or business that is not paying their fair share of taxes, you should consider coming forward. The IRS offers significant rewards for tips that lead to recovery, and you can be confident that your information will be treated with confidentiality. Contact Whistleblowers Internationals for help.