Does the IRS Pay You to Snitch?
The Internal Revenue Service (IRS) operates a comprehensive Whistleblower Program, incentivizing individuals to report suspected tax violations. This program plays a crucial role in the IRS’s efforts to combat tax fraud and non-compliance, ensuring a fair and equitable tax system for all.
Eligibility for Whistleblower Awards
To qualify for an award under the IRS Whistleblower Program, individuals must meet specific criteria. They must:
- Not be current or former employees of the Department of Treasury or federal government.
- Not have obtained the information through official duties or be legally prohibited from disclosing it.
- Not have obtained the information through a contract with the federal government.
- Not have filed a claim based on information obtained from an ineligible whistleblower.
Types of Whistleblower Awards
The IRS offers two types of whistleblower awards:
1. Section 7623(a) Awards:
- Discretionary awards for information leading to the collection of proceeds.
- No minimum threshold for the amount of proceeds collected.
2. Section 7623(b) Awards:
- Mandatory awards for information leading to the collection of proceeds exceeding $2 million.
- The taxpayer must have a gross income exceeding $200,000 for at least one of the tax years in question.
Award Percentage and Calculation
The award percentage for whistleblower claims generally ranges from 15% to 30% of the proceeds collected attributable to the whistleblower’s information. The actual percentage is determined based on factors such as:
- The significance of the information provided.
- The extent to which the information led to the collection of proceeds.
- The whistleblower’s level of cooperation with the IRS.
Submitting a Whistleblower Claim
Individuals can submit whistleblower claims by completing IRS Form 211, Application for Award for Original Information. The form must include:
- A detailed description of the alleged tax noncompliance.
- Supporting documentation, such as copies of records, receipts, and emails.
- A description of how and when the whistleblower became aware of the information.
- A complete description of the whistleblower’s relationship to the subject of the claim.
- The whistleblower’s original signature and date of signature.
Completed claims should be mailed to:
Internal Revenue Service
Whistleblower Office – ICE
1973 N Rulon White Blvd.
M/S 4110
Ogden, UT 84404
Timeline and Payment of Awards
The IRS typically takes several years to process whistleblower claims. Once a claim is approved, the whistleblower will receive a payment of the award amount. Awards are subject to applicable taxes and may be reduced by any outstanding debts owed to the IRS.
Additional Considerations
- The IRS Whistleblower Program provides protection against retaliation for whistleblowers who report suspected tax violations.
- The IRS encourages individuals to report suspected tax fraud even if they do not qualify for an award.
- The IRS Whistleblower Program is an essential tool in the fight against tax fraud and non-compliance, promoting a fair and equitable tax system.
IRS Tax Fraud Whistleblower Rewards and Protections
FAQ
How much do whistleblowers get paid?
How do I become a whistleblower IRS?
What is the minimum for IRS whistleblower?
Do IRS whistleblowers stay anonymous?
How much money did the IRS collect from whistleblowers in 2022?
The Whistleblower Office annual report for 2022 shows that the IRS collected $172.7 million from October 1, 2021, until October 1, 2022, from taxpayers who whistleblowers reported. During the same period, the Whistleblower Office issued 4,115 notices to individuals who reported tax evasion cases. However, only 396 claims were eligible for rewards.
Can the IRS reward you if you report a tax cheat?
The IRS can reward you if you report a tax cheat. The IRS Whistleblower Office awards eligible individuals that report tax cheats if the information they provide is used. The award is generally between 15% and 30% of the collected proceeds. How Often Does the IRS Catch Tax Mistakes?
Does the IRS have a whistleblower office?
The IRS has established a whistleblower office dedicated exclusively to working with whistleblowers. It has specific regulations and guidelines that whistleblowers must follow. IRS whistleblowers submit their information to the IRS Whistleblower Office on an IRS Form 211; they do not file a complaint in federal court.
How much does the IRS pay whistleblowers?
Since the inception of the Whistleblower Office in 2007, the IRS has paid more than $1.05 billion in over 2,500 awards to whistleblowers. The information provided by these individuals led to the successful collection of over $6.39 billion from non-compliant taxpayers.