Confidential Consultation


In select cases, the IRS has historically entered into Special Agreements with whistleblowers prior to the whistleblower providing detailed information about a taxpayer who has violated the Internal Revenue Code. Special Agreements had the advantage of giving whistleblowers a means of enforcing their claim to a reward, but these agreements have been largely supplanted by the new IRS Whistleblower Program. The program historically operated as follows:

Who Can Qualify for a Special Agreement Award

Internal Revenue Service staff do not generally recommend or suggest Special Agreements.  In general, such agreements must be specifically requested by the whistleblower.  As these agreements create specific obligations on the part of the Government, and the negotiation and approval process is relatively complex, the Government typically reserved these agreements for cases involving substantial underpayments of tax.  If the IRS agreed to enter into a Special Agreement, the Agreement would generally provide for the whistleblower to receive a reward if funds were recovered from the taxpayer as a result of the information provided by the whistleblower.  The Special Agreement would typically not provide for a reward to the whistleblower if:

(a)    The information furnished by the whistleblower is of no value to the IRS;

(b)   The information furnished by the whistleblower is already known to the IRS or is available in public records, or if the taxpayer identified by the whistleblower is already under criminal investigation or civil examination by the IRS with regard to the alleged scheme;

(c)    The whistleblower obtained, or is furnishing, the information while an employee of the Treasury Department, or if the Informant is furnishing the information on behalf of such individual;

(d)   The whistleblower obtained the information as part of his or her official duties as an employee of any other federal agency, or if the whistleblower is furnishing the information on behalf of such an individual;

(e)   The whistleblower obtained, or is furnishing, the information while a State officer or member of a State body or commission having access to federal returns, copies or abstracts, or if the whistleblower is furnishing the information on behalf of such an individual;

(f)     Payment would be contrary to State or local law; or

(g)   The recovery is so small as to result in a reward payment of less than one hundred dollars ($100.00).

(h)   If a whistleblower participated in the scheme he or she is reporting, the whistleblower may be precluded from obtaining a recovery from the IRS based on the scheme.  (If you would like assistance in determining whether your participation in a scheme may be an obstacle to recovery in your case, the Law Office of Paul D. Scott offers consultations without charge in cases involving underpayments of tax in excess of $1,000,000).

Amount of Reward

Rewards generally ranged up to 15% of amounts collected (including taxes, fines, and penalties but not interest) up to a maximum reward of $10 million in most cases.  These terms were subject to negotiation with the IRS during discussions regarding the Special Agreement.  Notably, it was possible to fix the percentage and the maximum amount of the potential award in the Special Agreement, prior to the whistleblower providing detailed information regarding the identity of the subject taxpayer and their tax avoidance scheme(s) to the Government.

Whistleblower Confidentiality

The Special Agreement procedure permited whistleblowers to enter into a contractual arrangement with the IRS without revealing their identity in the first instance.  (An intermediary, such as an attorney, could be used).  As cooperation by the whistleblower was required by the terms of the Reward Agreement, the whistleblower might be required to disclose his or her identity to the Government during its investigation and resolution of the alleged scheme.   Even if the whistleblower provided the IRS with his or her identity during the investigation, however, the IRS was normally willing to agree that it would not reveal the whistleblower’s identity, unless required by law or ordered by a federal judge or magistrate to do so.  

If the IRS ultimately recovers funds from the subject taxpayer and the whistleblower qualifies for a reward, the whistleblower will be obligated to disclose his or her name and identifying information to the IRS, prior to receiving any payments owed under the Special Agreement.  


Payments to whistleblowers under Special Agreements are made after the taxes, fines and penalties owed to the IRS by the subject taxpayer have been finally determined to be owed and have been collected.

Confidentiality of Taxpayer Information

The IRS will generally identify in the Special Agreement its statutory obligations under Internal Revenue Code § 6103 not to disclose information to the whistleblower regarding specific actions taken by the Service with respect to the information provided by the whistleblower.  It will also require the whistleblower to maintain the confidentiality of the taxpayer’s information and of information known to the whistleblower concerning the government’s investigation.

Waiver of Claim Under Form 211

If the IRS agrees to enter into a Special Agreement with a whistleblower, it will require that the whistleblower waive any rights to pursue any claim against the United States under Form 211 or any other provision of law.

Please be advised that this website is an information resource and is not intended to provide legal advice in your particular case.  We would be pleased to conduct a confidential review of your potential claim, but by doing so we are not agreeing to act as your counsel.  A written agreement between you and the Law Offices of Paul D. Scott is prerequisite to representation.  Past successes by the firm do not guarantee future results.


640 Washington Street, San Francisco, California 94111