IRS Whistleblower Program

As of 2024, the IRS Whistleblower Office has paid out over $1.2 billion in awards to whistleblowers and collected over $7 billion from non-compliant tax payers. As noted by the IRS Deputy Commissioner for Services and Enforcement, the program is “an important tool for improving tax administration.”

The current IRS Whistleblower Program was established in 2006 when Congress passed the Tax Relief and Health Care Act. The Act created the IRS Whistleblower Office, which oversees whistleblower claims. Under the Act, individuals who provide information about tax frauds that meets certain minimum thresholds are entitled to a percentage of the money IRS collects as a result of the whistleblower’s information. To qualify for an award, a whistleblower’s claim must be:

• Signed by the whistleblower under penalties of perjury;
• Related to a tax fraud that exceeds $2 million; and
• Related to a taxpayer. If the matter relates to an individual taxpayer, the taxpayer’s gross income must exceed $200,000 for at least one relevant tax year.

Whistleblowers with qualifying information that substantially contributes to an IRS recovery exceeding $2 million will typically receive 15% – 30% of the total amount collected.

In addition, the Act protects whistleblowers who report tax violations in multiple ways. First, the IRS keeps whistleblowers’ identities confidential with certain exceptions. In addition, in 2019 the Taxpayer First Act added anti-retaliation provisions for tax whistleblowers. Whistleblowers can now sue employers who retaliate against them for job reinstatement, double back pay, and other damages; and employers are prohibited from forcing whistleblowers to arbitrate retaliation claims.

Under the 2019 Taxpayer First Act, the IRS was authorized to exchange information with whistleblowers and their attorneys if doing so would aid the IRS’ investigation. In addition, the IRS must now notify tax whistleblowers of key developments in their cases. In particular, the IRS must now inform whistleblowers within 60 days if:

• The IRS has referred a case for audit or examination about which the whistleblower provided information.
• A taxpayer the whistleblower identified has made a tax payment related to the whistleblower’s information.

The IRS is now authorized to give written responses to requests for information from whistleblowers or their attorneys on the status of their whistleblower claim on a yearly basis.

Although the federal False Claims Act prohibits whistleblower claims based on tax violations, multiple states permit whistleblower tax violation claims under their False Claims Acts. Read more about state False Claims Acts and Getnick Law’s successful representation of New York State tax whistleblowers here.

If you think you may have information relating to tax fraud, fill out our contact form or call us at (212) 376-5666 for a free evaluation of your potential case. We represent our whistleblower clients on a contingent fee basis, meaning that an attorney’s fee is paid only if your case is successful.