Did you know the Internal Revenue Services (IRS) has an actual Whistleblower Office? That’s right, the official Whistleblower Office is dedicated to acknowledging the important role whistleblowers play in supporting the country’s tax administration. Since it handed out its first award in 2007 to 2024, the Whistleblower Office has paid over $1.2 billion in awards to individuals who came forward as whistleblowers. That amount represented the successful collection of $7 billion from taxpayers who were not in compliance.
The IRS celebrated National Whistleblower Appreciation Day on July 30, which is the day the Continental Congress passed the nation’s first whistleblower law in 1778. However, the first law related to whistleblowers on tax violations was not enacted until almost 90 years later in March 1867.
Whistleblower information that the IRS can act on is an important component of effective tax administration and contributes to identifying non-compliance and reducing the tax gap. For a whistleblower claim to be seriously considered, it must contain specific, timely and credible information. A whistleblower may qualify for an award when use of the information results in proceeds collected. Generally, the awards paid to whistleblowers range between 15 and 30% of the proceeds collected and attributable to their information.
In Fiscal Year 2023, the IRS paid awards totaling $88.8 million based on whistleblower information attributable to tax and other amounts collected of $338 million. In Fiscal Year 2023, the Whistleblower Office established 16,932 award claims, an increase of 44% compared to the average of the prior four years.
To submit a whistleblower claim, an individual must use IRS Form 211, Application for Award for Original Information PDF. The whistleblower must also include a description of the alleged tax noncompliance, including a written narrative explaining the issue; as well as information to support the narrative, such as copies of books and records, ledger sheets, receipts, bank records, contracts, emails, and the location of assets. The claim must also contain a description of documents or supporting evidence not in the whistleblower’s possession or control, and their location, and an explanation of how and when the whistleblower became aware of the information that forms the basis of the claim.
The whistleblower must also present a description of their current or former relationship (if any) to the subject of the claim (e.g., family member, acquaintance, client, employee, accountant, lawyer, bookkeeper, customer). And finally, the whistleblower must include their original signature and the date of signature. That information should be mailed to the IRS Whistleblower Office. The Office is currently working on a digital submission portal for whistleblower claims, which it plans to have online in 2025.
If you are considering submitting information to the IRS Whistleblower Office but are not sure how to proceed, consider talking with an experienced San Francisco tax attorney or professional. The tax attorney can help you complete the Form 211 or advise you whether it may or may not be considered valuable information to the Whistleblower Office. You can always contact a tax attorney if you are concerned about activity that may or may not need to be reported.
Allison Soares is a partner and tax attorney at Vanst Law LLP. It doesn’t matter the issue: audits, collections, appeals, international disclosures, grumpy people— Allison enjoys fixing problems. In addition to her legal work, she has worked in accounting and utilizes that knowledge to her advantage while handling cases involving EDD audits from San Francisco to San Diego.
