Can I receive an award?
Under the Tax Whistleblower Program, you will receive a reward if you bring information about tax fraud or underpayment to the attention of the IRS and your information results in the recovery of unpaid tax revenue by the IRS.
How much money can I receive as part of my tax whistleblower reward?
Under the Tax Relief and Health Care Act of 2006, tax whistleblowers may receive a reward ranging from 15% to 30% of the total taxes, penalties, and interest collected by the IRS. The actual percentage awarded to you is based on your contribution to the case.
The Tax Whistleblower Program applies to cases of tax fraud and underpayment totaling at least $2 million. In cases where the taxpayer is an individual, his gross annual income must exceed $200,000. You may still receive an award for cases that do not meet this minimum threshold; however, the amount of your reward is covered by the IRS Form 211 reward program under which rewards are discretionary and the maximum reward is 15 percent.
In general, only the first person to file a tax whistleblower claim will be eligible to receive a reward. Therefore, it is in your best interest to file your claim as soon as possible. Once a determination of an award has been made by the Whistleblower Office, you are entitled to review the basis for the Whistleblower Office decision. If upon review you believe the amount of the reward is inadequate, an appeal challenging the amount of the reward can be filed with the United States Tax Court. The IRS can reject a claim for several reasons, and it typically will not give specific information about why it will not pursue a claim. If a claim is rejected, we will use our experience to assess whether or not an appeal is warranted, and if so, we will represent you in an appeal.
What is the timeframe for filing a tax whistleblower claim?
The statute of limitations on tax whistleblower claims is three years from the date the tax return was filed. However, this timeframe extends to six years if the claim involves an omission in excess of 25% of the gross income stated on the tax return filed with the IRS. The statute of limitations does not apply if a false or fraudulent return was filed with the IRS in an attempt to evade taxes.
How long will the claim process take?
IRS investigations generally take years to complete. Though the IRS is expediting the whistleblower process, it has estimated that historically whistleblower claims have taken on average seven years to complete. The IRS investigates the claim, and if taxes are owed, it must either settle the matter with the taxpayer or take legal action. The taxpayer has rights and can appeal any decision made by the IRS. The IRS does not generally pay rewards until the claim has been completely resolved and all unpaid taxes, penalties, and interest has been collected. However, in some circumstances the whistleblower may successfully petition for a partial reward before the case is complete under the partial payment provisions of the Internal Revenue Service Manual. In some cases, substantial partial payments can be made years before final resolution of the case. You should discuss with your lawyer whether your claim may qualify for a partial payment.
Can I appeal the amount of the reward?
Yes. Once a determination of an award has been made by the Whistleblower Office, you are entitled to review the basis for the Whistleblower Office decision. If upon review you believe the amount of the reward is inadequate, an appeal challenging the amount of the reward can be filed with the United States Tax Court.
What if the IRS rejects my claim?
The IRS can reject a claim for several reasons, and it typically will not give specific information about why it will not pursue a claim. If a claim is rejected, we will use our experience to assess whether or not an appeal is warranted.
Do I have to be a United States citizen to be eligible for a tax whistleblower reward?
No, you do not have to be a United States citizen to receive a tax whistleblower reward. The Tax Whistleblower Program is open to foreign whistleblowers who provide information resulting in the recovery of unpaid taxes totaling at least $2 million.