IRS TAX WHISTLEBLOWER PROGRAM
The Tax Whistleblower Reward Program
In December of 2006, Congress improved the IRS Tax Whistleblower Program. Today taxpayers (i.e., individuals, businesses, trusts, and estates) underreport and underpay approximately $450 billion in taxes (tax fraud/tax evasion) every year, according to a study released by the Internal Revenue Service. This group is comprised largely of wealthy taxpayers who intentionally underreport or underpay their tax liability. This missing revenue causes unnecessary increases in annual deficits, national debt, and interest payments.
The recent IRS budget causes the IRS to conduct business more efficiently and therefore it uses its best efforts to collect from taxpayers who underreport and underpay tax (Note: fraud is not required, simply an underpayment of tax).
Many times tax schemes and tax shelters used by these taxpayers have often become so sophisticated that efforts by the IRS to detect them have become overly burdensome. Other times, it may be a simple error on a tax return that has gone undetected by the IRS. Whatever the situation, the annual amount of unreported and unpaid tax continues to grow each year.
Confronted with the devastating effect of the ongoing underreporting of tax, the United States is taking a new approach to enforcement efforts aimed at detecting these particular taxpayers.
The Solution: TAX WHISTLEBLOWERS
In recent legislation (December 2006), Congress, through the IRS, is willing to pay a tax reward to whistleblowers that have "specific and credible" information that substantially contribute to the determination and collection of tax from taxpayers. The United States has announced that it will reward a tax whistleblower up to 30% of the amount collected if they provide "specific and credible" information that "substantially" leads to the determination and collection of $2 million or more of tax (including penalties and interest).
In summary, this legislation mandates the IRS to pay any person who provides information under the “Tax Whistleblower Program” a minimum of 15%, and a maximum of 30%, of the amount that the IRS actually collects. The whistleblower must file IRS Form 211.
Collection of tax based upon information from a whistleblower is approximately 40% of what the cost would be if the IRS simply conducted an examination without the whistleblower information.
The Attorneys at the Tax Whistleblower Law Firm are experienced and knowledgeable tax attorneys whose sole practice is working with the IRS Tax Whistleblower Program.