As you might be aware, the IRS was established by the Tax Relief and Health Care Act of 2006 and paid its first award one year later. As mentioned in the IR-2024-199, “… since issuing its first award in 2007 through June 2024, the IRS has paid over $1.2 billion in awards based on the successful collection of $7 billion from non-compliant taxpayers.”
In fact, the IRS celebrates the National Whistleblower Day on July 30. You can consider celebrating too if you got a net influx of $5.8 billion dollars from this program.
The largest award ($104m) was provided back in 2012 to Bradley Birkenfeld who was a previous employee of UBS and revealed illegal activities allowing wealthy Americans hide funds in Swiss accounts.
Recently, the IRS awarded $74 million to anonymous whistleblowers as mentioned in the Bloomberg law article “… Three people shared the award after disclosing an offshore tax-evasion scheme that spanned 15 years, enabling the IRS to collect $263 million from an unidentified individual, according to attorneys for Getnick Law, which helped represent the lead whistleblower.”
Regarding the process, the IRS has a dedicated Whistleblower office where you can submit a whistleblower claim filing out Form 211 – Application for Award for Original Information. Once the IRS receives the form, the IRS can either:
a) investigate further and if there are funds recovered, you might be entitled to compensation between 10% to 30% of the money collected.
b) communicate via letter that the IRS does not want to investigate further as might not be relevant, not enough support or any other reasons.
If I have to guess future potential whistleblowers, my personal main guess would be in the ERC windmills or social media tax gurus / promoters that have committed illegal activities or extremely unreasonable tax positions. For more information on this topic, please, reach out to our team.
Link Reuters 2012 – Whistleblower in UBS tax case gets record $104 million
Link Bloomberg law – Tax Tipsters Getting $74 Million Shows IRS Progress, Lawyers Say
Link National Law Review – Groundbreaking $263 Million Recovery in IRS Whistleblower Program
