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The IRS whistleblower program has been around since the 1800s. In December 2006, the Tax Relief and Health Care Act made fundamental changes to the IRS whistleblower awards program and the relevant section of the relevant section of the relevant section of the tax code. The key change in the law was the addition of IRC section 7623(b), under which awards aie no longer discretionary. Prior to the amendment, the IRS retained complete authority to determine whether a reward would be paid, absent an express and definite agreement setting forth the claim and amount of the payment. Such contracts are unnecessary following the 2006 amendments, an administrative or judicial as the IRS is obligated to pay a 15% to 30% award (of the collected proceeds) if it commences an administrative or judicial action agamst a taxpayer based on the tips furnished by the whistleblower [see IRC section 7623(b)(6)(A)],
In addition to providing greater incentives to whistleblowers, the Tax Relief and Health Care Act required the IRS to establish a Whistleblower Office for processing whistleblower award applications received on or after December 20, 2006. More recently, the U S. Treasury Department issued new regulations, effective August 12, 2014, to implement IRC section 7623. Those regulations apply generally to claims that ai e open as of the effective date.
Initiating a Whistleblower Claim
Applications for whistleblower awards aie made by submitting IRS Form 211, Application for Reward for Original Information, to the IRS Whistleblower Office. Among the other information requested under IRS Form 211, the whistleblower must provide: 1) specific and credible information regarding the taxpayer or entities that the whistleblower believes have failed to comply with tax laws and that will lead to the collection of unpaid taxes; 2) supporting documentation (such as books and records) to substantiate the claim or a description of such documents and their location if not in the whistleblower's possession; 3) a description of how the information forming the basis of the daim came to the whistleblower's attention, how it was acquired, and the whistleblower's relationship to the taxpayer; and 4) facts supporting the amount the whistleblower's...