Overview of Program
The IRS Whistleblower Program, enacted as part of the Tax Relief and Health Care Act of 2006, is designed to provide an incentive to private citizens to provide information to the federal government about tax fraud. The IRS Whistleblower Program provides mandatory rewards for whistleblowers.
For more information about how to file an IRS whistleblower case, please see our IRS Whistleblower FAQ page.
Under the IRS Whistleblower Program, a whistleblower who provides the IRS information that leads to the recovery of tax fraud is eligible for one of two types of awards, depending on the size of the fraud.
- If the fraud involves more than $2 million (or an individual whose annual gross income exceeds $200,000), the whistleblower is eligible for a mandatory award of between 15% and 30% of the amount collected.
- If the fraud involves less than $2 million (or an individual whose annual gross income is less than $200,000), the whistleblower is eligible for a discretionary award of up to 15% of the amount collected.
There is no cap on the amount of money that the IRS can award. In 2012, one whistleblower was awarded $104 million for exposing Swiss banking schemes used to enable wealthy American citizens to dodge their taxes. Also in 2012, another whistleblower was awarded $38 million for exposing the tax avoidance practices of a Fortune 500 company.
Common Types of Fraud
While not an exhaustive list, some of the most common types of reportable tax fraud under the IRS Whistleblower Program include:
- Tax evasion
- Filing fraudulent tax returns
- Hiding or transferring assets or income out of the United States.
- Making false entries in books or records
- Maintaining two sets of books or records
- Participating in fraudulent tax shelters
- Recording personal expenses as business expenses
Robbins Geller Rudman & Dowd LLP is committed to fighting for our whistleblower clients in their courageous efforts to combat fraud. We are dedicated to ensuring that our clients receive the compensation and protection they deserve. If you are aware of any securities, commodities, or tax law violations or fraud on the government and would like to consult with us on a confidential basis about a potential whistleblower case, please contact Jonah H. Goldstein or James E. Barz.