The IRS whistleblower office allows individuals to report tax evasion, potentially receiving a reward of 15-30% of the collected amount. The IRS follows up on credible information and may force accurate tax returns. The agency offers a reward, which can be appealed within 30 days.
The Internal Revenue Service (IRS) whistleblower office is an office at the agency responsible for collecting federal taxes in the United States where people with information about tax evasion can report it to IRS personnel. Depending on the nature of the situation, an IRS whistleblower may be eligible for a reward based on how much money the agency was able to raise in response to the information. People can contact the office by phone, mail and email and must provide credible and useful information, not just vague suggestions or suspicions.
Federal tax collection in the United States is heavily dependent on a voluntary filing system, with individuals and businesses filing tax records and using the returns they make to determine their total tax liability. Compliance is generally very high in the United States, but there are cases where individuals and companies refuse to pay taxes or use fraudulent means to reduce their tax burden. The IRS is especially interested in cases where large amounts of money are involved, and the IRS reporting program is designed to help it collect in these situations.
If information provided by a member of the general public leads to the collection of $2 million United States Dollars (USD) or more, the IRS whistleblower may collect between 15% and 30% of that amount. Smaller collections may result in smaller or no prizes. In the past, the IRS has had a problem with people calling in vindictively tipping, with the goal of triggering a revenge audit. The agency advises taxpayers on the scope and limitations of the program to discourage this behavior, as it is expensive to initiate tax investigations and the agency wants to focus on large claims, not relatively minor tax evasion.
Individuals who contact the IRS Information Office must provide the name and contact information of the business or individual taxpayer, along with evidence of tax evasion. This could range from a statement that a person with an income of more than $200,000 USD a year does not pay taxes to proof of accounting fraud designed to keep tax liability as low as possible in a business. The IRS will follow up on the information and may raise funds, stop a refund, or force you to resubmit a tax return with accurate information.
After an IRS whistleblower submits the information and the IRS collects, the agency will send a statement indicating how much money, if any, it is offering in reward. People generally have 30 days to appeal the reward if they feel it isn’t enough. The IRS has been accused by some whistleblowers of dragging its feet on bounty money or excluding bounty rewards in some cases as a way to save money.
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