February 1, 2017

IRS Whistleblower Program Yields Promising Results

By the C|C Whistleblower Lawyer Team

On January 27, 2017, the United States Tax Court entered a favorable order for two whistleblowers who provided information to the IRS. The order entitled the whistleblowers to an award of about $8.9 million each. The Tax Relief and Health Care Act of 2006, which created the “IRS whistleblower program,” provides for mandatory rewards of 15-30% of any government recovery to individuals who provide the Internal Revenue Service with information relating to any tax fraud for which the IRS is able to recover in excess of $2 million.

This news is heartening for those invested in the success of the IRS Whistleblower program. A perceived lack of interest in hearing from whistleblowers paired with a paucity of whistleblower awards has led many to fear that the program will never reach its full potential. To see tangible results in the form of sizable awards to whistleblowers, albeit with help from the United States Tax Court, demonstrates that the IRS office of the whistleblower continues to take its obligations seriously to investigate information obtained from whistleblowers. Nothing is known about the substance of the investigation that led to the award; however, this practice is entirely consistent with the high level of secrecy associated with the IRS whistleblower program. Overall, this decision can serve to motivate more potential whistleblowers to come forward to the IRS with information related to tax fraud.

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