The IRS is authorized to pay for information about taxpayers who underreport their tax liabilities. The awards can be up to 30% of the total amount collected by the IRS as a result of the information provided.
Unfortunately, the IRS administers this whistleblower program in a way that makes it difficult for taxpayers who come forward to receive their awards.
This is one area where we can help. We use our knowledge of tax law to help clients submit whistleblower claims with the aim of getting them accepted and we use our experience with the IRS and its processes to help get the claims processed.
About the IRS’s whistleblower program.
Did you know that the IRS is authorized to pay you if you report taxpayers that fail to pay their fair share of taxes? This is often referred to as the IRS’s whistleblower program.
If you can provide legitimate and clear proof to the IRS that someone has not paid their taxes and that this is a significant federal tax issue, you may be entitled to an award of up to 30% of the total amount collected.
The IRS will typically act on relevant information you submit if you follow its whistleblower guidelines. Once it does, it will begin an audit of the taxpayer and it may assess additional tax, penalties, and interest. This process can take several years to complete. Once it completes its investigation and collects from the taxpayer, the IRS will then determine the amount of your award.
Normally awards are only paid out if it can be shown that the IRS would not otherwise have collected the tax and if the amount in question is significant. The IRS may pay nothing if it determines that the information provided was not relevant for the tax that was collected or if your submission does not meet the IRS’s program requirements.
IRS delays in processing whistleblower claims.
During the past few years, the IRS has been under fire for its poor handling of these cases and for not updating whistleblowers of case proceedings in a timely manner. Part of the reason behind this is that the IRS actually has very little authority to disclose to the whistleblower what is happening with the audit or the whistleblower claim.
Whistleblowers take a risk in coming forward as they are sometimes dealing with people who hold a lot of power and influence. This is one reason why some feel that they should have certain rights to get answers from the IRS about their claims.
However, the IRS does not always interpret the whistleblower rules in a way that benefits the claimant. In addition, the IRS and the whistleblower office is constantly in flux due to budget and staff cuts, which causes further administrative complications and delays for those submitting whistleblower claims.
But whistleblowers are not without remedies. Whistleblowers have the right to contest some whistleblower claims that are wrongfully denied by the IRS.
If the amount of the award is unsatisfactory, a whistleblower can make an appeal the decision in court. In many cases, the whistleblower can even remain anonymous during the court proceeding.
Act now to get your whistleblower award.
Whistleblower claims should be handled with extreme care for the protection of everyone involved. If you need help submitting a whistleblower claim, contact our office for a consultation.
We are former IRS attorneys, appeals officers, and auditors who help taxpayers with whistleblower claims. We offer compassionate, individualized service at manageable rates.
Call today for a confidential consultation. Our number is 800-521-0230.
More About Whistleblower Claims
- Whistleblower’s Claim Limited by IRS’s DiscretionIf you turn in a tax cheat by filing a whistleblower claim with the IRS, what happens if the IRS does not realize the importance of the information received? Put another way, what if the IRS leaves money on the table by failing to assess the full amount for the taxpayer? Is the whistleblower entitled to an award based on a percentage of the higher amount? The court addresses this in Apruzzese v. Commissioner, T.C. Memo. 2019-141. Facts & Procedural History The petitioner was involved in a lawsuit with the taxpayer. The taxpayer was an estate. The petitioner submitted a… Continue reading Whistleblower’s Claim Limited by IRS’s Discretion