As reported by The Washington Post, on April 4, 2014, the IRS issued its "Fiscal Year 2013 Report to the Congress on the Use of Section 7623" revealing that it paid whistleblowers $53 million in 2013. The agency said that it paid out 122 awards last year, making the average payout a whopping $435,000.
The IRS Code (Section 7623(b)) permits (but does not require, as does the SEC's bounty program) the IRS to pay whistleblowers an award of between 15 and 30 percent of the proceeds collected by the IRS relating to the collection of unpaid taxes, penalties, interest, or additional amounts. In order to qualify for an award, the information provided by the whistleblower must:
- Relate to a tax noncompliance matter in which the taxes, interest, and additional amounts in dispute exceed $2,000,000; and
- Relate to a taxpayer, and, if an individual taxpayer, one whose gross income exceeds $200,000 for at least one of the tax years in question.
The IRS reported that it received 9,268 whistleblower claims in fiscal year 2013, a slight increase from 2012. Nevertheless, the total amount of awards paid in 2013 were nearly half of those paid in 2012, in which the IRS issued a record $125.4 million in awards to whistleblowers. The larger amount paid out in 2012 versus 2013 is largely attributable to a single award of $104 million to one whistleblower.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
