IRS Whistleblower Reward Program

Whistleblower - Informant Reward
The IRS Whistleblower Office pays money to people who blow the whistle on persons who fail to pay tax. If the IRS uses information provided by the whistleblower, it may award the whistleblower up to 30 percent of the additional tax, penalty and other amounts it collects from the non-compliant taxpayer.

Who qualifies for the reward?
The IRS may pay awards to people who provide specific and credible information to the IRS if the information results in the collection of taxes, penalties, interest or other amounts from the non-compliant taxpayer.

What are the rules for receiving a reward?
There are two types of rewards. If the taxes, penalties, interest and other amounts in dispute exceed $2 million (and a few additional qualifications are met), the IRS may pay 15 to 30 percent of the amount collected. If the case deals with an individual, his or her annual gross income must be more than $200,000. If the whistleblower disagrees with the outcome of the claim, he or she can appeal to the Tax Court. These rules are found at Internal Revenue Code (IRC) Section 7623(b) - Whistleblower Rules.

The IRS also has an reward program for other whistleblowers - generally those who do not meet the dollar thresholds of $2 million in dispute or cases involving individual taxpayers with gross income of less that $200,000. The reward through this program are less, with a maximum reward of 15 percent up to $10 million. In addition, the awards are discretionary and the informant cannot dispute the outcome of the claim in Tax Court. The rules for these cases are found at IRC Section 7623(a) - Informant Claims Program.

If you decide to submit information and seek a reward, use IRS Form 211. The same form is used for both award programs. -- Source - www.irs.gov