The IRS Whistleblower Program

The IRS Whistleblower Program is a program established by the Internal Revenue Service (IRS) in the United States to encourage individuals to report information about tax evasion, fraud, and other violations of tax laws. It offers incentives to whistleblowers who provide credible information that leads to the collection of unpaid taxes. Here are some key aspects and benefits of the program:

1. Encouraging Reporting: The program encourages individuals with knowledge of tax violations to come forward and report them, thereby helping the IRS identify and recover unpaid taxes that might otherwise go undetected.
2. Financial Rewards: One of the main benefits of the program is the potential financial reward for whistleblowers. If the reported information leads to the collection of unpaid taxes, the whistleblower may be eligible to receive a reward. The reward amount can range from 15% to 30% of the collected proceeds, with a maximum reward of 15% for cases involving individuals with gross incomes below $200,000.
3. Confidentiality: The IRS is required to protect the identity of the whistleblower to the extent allowed by law. While there may be instances where the whistleblower’s identity becomes known during an investigation or if the case goes to court, the program aims to maintain confidentiality.
4. Combating Tax Evasion: The program plays a crucial role in combating tax evasion and fraud by providing an avenue for individuals with inside knowledge to report illegal activities. This helps ensure that everyone pays their fair share of taxes and maintains the integrity of the tax system.
5. Legal Protections: Whistleblowers who report tax violations are protected from retaliation. If a whistleblower experiences adverse employment actions as a result of their disclosure, they may be eligible for legal remedies and protections under the law.
6. Contributing to Public Interest: By reporting tax evasion, whistleblowers contribute to the public interest by promoting compliance with tax laws, protecting the economy, and ensuring that tax revenue is collected appropriately. Their actions can help maintain the fairness and equity of the tax system.

It’s important to note that participating in the IRS Whistleblower Program requires credible and specific information about tax violations. Whistleblowers should consult with Matthew Jennings, JD, MBA, EA, RFC®, CEP®, CES™, aka Tax King Matt to understand the program’s requirements, potential risks, and rewards before submitting a report.