IRS Whistleblower Program
PRACTICE AREAS ────
What is an IRS whistleblower?
The IRS Whistleblower Program, established by the Tax Relief and Health Care Act of 2006, created a dedicated IRS Whistleblower Office. This office works closely with individuals who report tax fraud and ensures eligible whistleblowers receive a portion of the recovered funds. Working with an experienced IRS whistleblower attorney can significantly improve your chances of a successful claim.
The program guarantees whistleblowers between 15% and 30% of the government’s collected proceeds resulting from their report. It’s important to understand that payment only occurs after the IRS collects all taxes, penalties, and interest owed, and after all statutory periods for taxpayer refund claims have expired. An IRS whistleblower lawyer can help you navigate this complex timeline.
To file a complaint, whistleblowers must submit Form 211 rather than filing in federal court. The IRS reviews the evidence and determines the appropriate course of action. Due to confidentiality requirements, the IRS cannot disclose actions taken after submission or investigation status. The agency will only confirm if a case remains open or has been closed, and if applicable, provide information on the whistleblower’s award amount.
Unlike some other whistleblower programs, IRS whistleblowers cannot participate as parties in enforcement actions against defendants, nor can they independently pursue such actions. Consulting with an IRS whistleblower attorney can help you understand these limitations and maximize your potential reward.
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IRS Whistleblower FAQS
What is the goal of the IRS Whistleblower Program?
Established under 26 U.S.C. §7623, the IRS Whistleblower Program aims to enhance law enforcement efforts in detecting tax fraud. To achieve this, the program offers substantial monetary incentives—up to 30% of the total amount recovered in tax enforcement proceedings—to individuals who provide credible evidence of tax fraud to the IRS. An experienced IRS whistleblower lawyer can help ensure your evidence meets the program’s standards.
How do you file an IRS whistleblower claim?
To file a claim with the IRS Whistleblower Office, you’ll need to complete specific forms depending on the situation:
- Form 3949-A: For reporting a business or individual
- Form 14157: For reporting a fraudulent tax preparer or abusive tax schemes by preparers/companies
- Form 14242: For reporting individuals promoting or engaging in abusive tax-avoidance schemes
- Form 13909: For reporting tax-exempt organizations (churches, charities, trade associations)
These forms require:
- A detailed and accurate account of the alleged violation, including all relevant facts
- An explanation of how the actions violate tax laws
- Information about how you obtained the evidence
- The estimated amount owed by the alleged violator
It’s crucial to include all supporting documentation and evidence with your completed form. Remember that submissions are made under penalty of perjury. An IRS whistleblower attorney can help ensure your submission is complete and compelling.
Can you file the complaint anonymously?
The IRS protects whistleblower identities and does not disclose names when granting awards. If revealing your identity becomes necessary for the investigation, the IRS will consult with you before proceeding.
For complete anonymity, an IRS whistleblower lawyer can file on your behalf. Many people searching for “IRS whistleblower attorney” are specifically looking for this protection service.
Who is eligible for the whistleblower award?
To qualify for an award, you must submit specific and credible information about tax fraud using IRS Form 211 (Application for Award for Original Information).
The IRS whistleblower program is not limited to U.S. citizens. However, to qualify for the mandatory award program (15-30%), your information must lead to the collection of taxes, penalties, interest, and other disputed amounts exceeding $2 million.
For cases involving less than $2 million, or where an individual’s gross income is below $200,000, the IRS may still award up to 15% of the collected amount. The same percentage applies when information leads to collections from individuals whose annual gross income exceeds $200,000.
These payment rules are codified in §7623 of the Internal Revenue Code. An experienced IRS whistleblower attorney can help determine if your case meets these thresholds.
Can someone who was part of the scheme to defraud the IRS receive an award for being a whistleblower?
Yes. Even if you played a role in the tax fraud, you can still serve as a whistleblower and receive an award. An IRS whistleblower lawyer can help navigate the complexities of such situations.
Does the IRS Whistleblower Program cover fraudulent claims for payment submitted to the federal government?
No. Fraudulent payment claims to the federal government fall under the False Claims Act—a separate statute. This Act covers submitting inaccurate information about product quality or cost to the government, as well as billing Medicare for unnecessary or unprovided services. Whistleblowers filing under this Act can receive 15-30% of the recovered amount. An experienced IRS whistleblower attorney can help determine which program applies to your situation.
Does the IRS Whistleblower Program cover securities fraud?
No. Securities law violations fall under the Dodd-Frank Wall Street Reform and Protection Act of 2010. Whistleblowers reporting violations like insider trading, money laundering, or Foreign Corrupt Practices Act violations may receive rewards if the SEC or other government authorities recover over $1 million based on their information. The CFTC also has a similar whistleblower program established by the Dodd-Frank Act. An IRS whistleblower lawyer can help direct you to the appropriate program.
What happens once you file the whistleblower claim?
After submitting IRS Form 211, the IRS begins an investigation to assess the case’s viability. The evaluation depends primarily on the type of fraud reported, the strength of your evidence, and the amount of money involved.
During the investigation, the IRS provides minimal updates and will only confirm if the case remains open or closed when asked. Once the investigation concludes, the IRS informs whistleblowers of their eligibility for an award and specifies the amount. For cases involving sums exceeding $2 million or individuals earning over $200,000 in gross income, whistleblowers who don’t receive an award may appeal to the U.S. Tax Court.
The entire process often takes several years, and award payments depend on the IRS successfully collecting all money owed under the claim. Working with an IRS whistleblower attorney can help manage expectations and improve your chances of success throughout this lengthy process.
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Being selected for an audit is arguably one of the worst things that could happen to a small business owner, or at least that’s how I felt.
It felt a lot less stressful when I hired Jess to communicate with the IRS on my behalf. Her extensive knowledge of tax law was evident when she would educate not just me but also the RA on the proper law.
She went the extra mile every day – with driving to me, essentially holding my hand through an interview, and making sure all responses to the RA were effective.
If you get audited – I strongly recommend having her by your side.
– Parul G.
As a small business owner, I had an enormous amount of questions. I needed to know how to book keep, claim deductions and credits, navigate selling online, providing services in different jurisdictions, and filing quarterly taxes.
A small business requires an enormous attention to detail and Jessica helped me be meticulous in strategizing my tax landscape and know the necessary laws and regulations.
I highly recommend her to anyone with tax questions.
– Nate W.
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