IRS Whistleblowers

IRS Rewards Overview

IRS Whistleblower Programs

The Internal Revenue Service is authorized under Section 7623 of the Internal Revenue Code to pay rewards to whistleblowers who provide information leading to the recovery of funds from those who underpay taxes to the United States government.  There are two main programs.

Claims Involving More than $2 million – 26 U.S.C. 7623(b)

In December 2006, a new law went into effect that dramatically strengthened the IRS’s whistleblower program.   Under the new program, qualified whistleblowers may be entitled to awards of up to 30% of funds that are recovered by the IRS based on information provided by the whistleblowers regarding tax schemes exceeding $2 million.

Claims Involving Under $2 million – 26 U.S.C. 7623(a)

The old Form 211 program permitted whistleblowers to request rewards from the IRS after reporting information about individuals or entities who have underpaid taxes. Notably, however, payment of any reward by the IRS under the former Form 211 procedure is within the government’s discretion and cannot be compelled by the whistleblower. This program (now referred to as the 7623(a) program) is still available for claims not large enough to qualify for the increased rewards under the new IRS Whistleblower Program.

Special Agreements

The IRS historically maintained a lesser known program commonly referred to as its Special Agreement program. The Special Agreement program provided more certainty to whistleblowers than the old Form 211 program, for it permitted them to enter into a contract with the IRS in advance of providing detailed information about the subject taxpayer and their alleged tax violations.  The Special Agreement program, however, has now been replaced by the foregoing claims-based programs.

The Law Offices of Paul D. Scott offers confidential consultations at no charge regarding potential claims involving underpayments of tax in excess of $2,000,000.