IRS Whistleblower Program

Two things are certain in life: death and taxes. However, some people have a hard time accepting those simple truths. While individuals and companies may not like paying taxes, some go so far as to lie to avoid taxes. That tax fraud threatens the infrastructure of our government and society because it deprives the government of funding for basic services, such as schools and the military.

The Internal Revenue Service (IRS) has been fighting tax fraud since the passage of the Tax Code. However, it recently set up a whistleblower program to engage the public in the fight against tax fraud. Individuals with knowledge of tax fraud now have the ability to file a whistleblower claim to bring such fraud to the attention of the IRS. In return, the IRS whistleblower program provides financial awards for eligible whistleblowers whose disclosures lead to a successful IRS action.
What Is the IRS Whistleblower Program?
The IRS Whistleblower Office was established by the Tax Relief and Health Care Act of 2006. Under the program, an individual with knowledge of tax fraud may report it to the IRS. The IRS will then investigate the credibility of those allegations. If the IRS prosecutes the tax fraudster and recovers back taxes, it will then pay the eligible whistleblower an award worth between 15 and 30 percent of the total proceeds that IRS collects. In addition, the whistleblower may have a claim under a similar state tax whistleblower law.
Who Can Be a Whistleblower?
In order to be an eligible whistleblower, an individual must have information about a potential violation of tax law that has occurred, is ongoing, or is about to occur. Such violations can include, but are not limited to:
  • Tax Shelters that violate the Sham Transaction Doctrine, the Economic Substance Doctrine and/or the Business Purpose Doctrine.
  • Hiding or omitting taxable income.
  • Misidentifying personal expenses as business costs.
  • Misrepresenting the size of deductions, such as charitable donations.
Have a question about whether or not you may have a whistleblower claim? Call us today at (248) 539-7420.. All inquiries will be kept strictly confidential. Please note that it is important to act promptly. Any delays may jeopardize your ability to successfully file a whistleblower case. Additionally, many whistleblower laws also have statutes of limitation which act as filing deadlines, so you must act quickly to protect any rights you may have.