The Internal Revenue Service (IRS) has a Whistle-Blower Office that allows the IRS to pay awards to whistle-blowers for information leading to detecting underpayments of tax and punishing persons guilty of violating the IRS tax laws.*
According to the IRS, $2 billion was collected by the IRS because of information provided by whistle-blowers. Awards paid to whistle-blowers must be paid from collected proceeds.**
- In order to claim an award, the whistle-blower must complete and submit to the IRS Form 211 entitled, “Application for Award for Original Information.”
- The whistle-blower must also detail specific facts and circumstances of the violation of the internal revenue laws, including all available documentation that supports the whistle-blowers allegations.
- The whistle-blower is allowed to deduct court costs and attorney fees paid by or on behalf of the whistle-blower that were incurred in providing the documentation which led to providing the violation of tax laws.
- However, the deduction cannot exceed the amount the whistle-blower included in gross income as the result of the award.
The IRS does its best to protect the identity of the whistle-blower before revealing the whistle-blower’s identity. Contact my law firm for more information.