The Internal Revenue Service (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.
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.