In 2006, Congress passed the Tax Relief and Health Care Act of 2006 creating the modern IRS whistleblower program. The IRS will pay money to people who blow the whistle on corporations or individuals who fail to pay the tax that they owe. The award can be worth between 15 and 30 percent of the total proceeds that the IRS collects if the IRS moves ahead based on the information provided. Under the law, these awards will be paid when the amount identified by the whistleblower (including taxes, penalties and interest) is more than $2 million. If the reluctant taxpayer is an individual, they must have at least $200,000 in gross income.
The IRS has cautioned that it is looking for “solid information,” not educated guesses, and prospective whistleblowers should take that caution seriously. The IRS program has been widely criticized for its slow turnover of cases, so only the most detailed and fact-based informants are likely to benefit from coming forward. If you are in possession of such information, and you wish to come forward, please contact us.