The IRS Whistleblower Reward Program pays money to people who blow the whistle on companies and individuals who fail to pay their taxes. In legislation enacted in December 2006, Congress turned to the American people to expose those who under report or fail to pay their taxes.
Under the law, any person who provides information that leads to the identification of $2 million or more of unreported tax, including interest and penalties, will be rewarded by the government. If the non-compliant taxpayer is an individual, he must make at least $200,000 in gross income. The new legislation guarantees that any person who provides information under this Whistleblower Rewards Program will receive a minimum of 15 percent, and a maximum of 30%, of the additional tax, penalty, and other amounts it collects.
The IRS is looking for credible information, not unsupported speculation or an educated guess. Additionally, the IRS is looking for a significant federal tax issue; this is not a program for resolving personal problems or disputes about a business relationship. The IRS Whistleblower Office will be responsible for assessing and analyzing incoming tips. After determining their degree of credibility, the case will be assigned to the appropriate IRS office for further investigation.