The Internal Revenue ServiceĀ (IRS) has released figures stating that it had paid at least $53 million to whistleblowers during 2013 as part of its informant award program. These whistleblowers, who received an average bounty of $435,000, provided information that led to the assessment and collection of more than $367 million in taxes. It is expected that the amounts collected as a result of whistleblowers will increase yearly from 10-20% and that the whistleblower awards will also increase substantially as more moneys are collected in larger cases. Under the IRS program a whistleblower may maintain his or her anonymity and still reveal information and collect the reward. This fact has increased the numbers of individuals coming forward with information about tax evasion.
Ā The program is currently subject to the following limitations:
- The IRS pays a bounty of between 15 and 30 percent for information that leads to the recovery of $2 million or more. If the delinquent taxpayer is an individual, his or her annual income must be in excess of $200,000.
- The IRS also has a program for smaller cases that do not meet the above criteria. Awards in these cases are capped at 15 percent and are wholly discretionary.
- In any case, the information provided must be specific and credible and must actually lead to the collection of delinquent taxes. The IRS does not pay a bounty for speculation or innuendo.
Jeffrey Newman represents whistleblower.
