By the Constantine Cannon Whistleblower Team

On April 18, the IRS Whistleblower Office announced its first ever multi-year operating plan aimed at expanding the reach, visibility, and impact of its Whistleblower Program.

Created by Congress in 2006, the IRS Whistleblower Program has delivered more than $7.4 billion in collected proceeds and awarded over $1.3 billion to whistleblowers who helped expose significant tax fraud and evasion. In fiscal year 2023 alone, the program paid out $123.5 million in awards based on $474.7 million in collections attributable to whistleblower information.

The program has long been praised by policymakers and tax enforcement advocates, but it has also faced criticism for delays, lack of transparency, and inconsistent application of whistleblower protections. The IRS Whistleblower Office aims to turn that around.

With that in mind, the operating plan lays out six core priorities:

Enhance the claim submission process to promote greater efficiency.
Use high-value whistleblower information effectively.
Award whistleblowers fairly and as soon as possible.
Keep whistleblowers informed of the status of their claims and the basis for IRS decisions on claims.
Safeguard whistleblower and taxpayer information.
Ensure that our workforce is supported with effective tools, technology, training and other resources.

These six priorities are supported by 38 specific initiatives aimed at improving both short-term processes and long-term program development.

The operational plan builds on several improvements already underway, including digitizing whistleblower reports, developing internal performance metrics to better track progress on claims, and creating the Office of Promoter Investigations, a unit focused on identifying and mitigating tax avoidance abuses.

What Role Do Whistleblowers Play?

IRS Whistleblower Office Director John Hinman expressed the importance of whistleblowers noting that “we need help from whistleblowers – people with firsthand knowledge of non-compliance who are willing to share what they know with us so we can investigate it when warranted.” He further noted that “whistleblower information that the IRS can act on is an important component of effective tax administration as it bolsters the fair, efficient, and effective enforcement of our nation’s tax laws.”

To qualify for an award, whistleblowers must provide specific and credible evidence of significant underpayment or evasion of tax liabilities. If the IRS uses the information to collect more than $2 million (or $200,000 in cases involving individual taxpayers), the whistleblower may be entitled to receive between 15 and 30 percent of the amount collected.

Since whistleblower rewards are only available when the amounts recovered are substantial, previously successful claims have involved corporate tax fraud, vast tax avoidance schemes, and fraud by high-net-worth individuals. For example, in our Top 10 Whistleblower Awards for 2024 round-up, we discussed the $74 million awarded to three whistleblowers for reporting an offshore tax evasion scheme that led the agency to collect $263 million from an unidentified individual.

Constantine Cannon whistleblower partner Marlene Koury commented: “The IRS Whistleblower Office counts on the public’s readiness to speak up. Reporting IRS law violations is essential to upholding the integrity of our tax system and ensuring that all individuals and businesses contribute their fair share to the public good.”

Our Firm Helps IRS Whistleblowers

Constantine Cannon’s whistleblower attorneys understand the complex and ever-changing landscape of state and federal whistleblower laws. Our team can help whistleblowers submit stronger claims, connecting the whistleblower’s evidence with applicable laws. Thorough submissions will have better chances of success, in encouraging IRS officials to investigate the fraud and for whistleblowers to obtain the largest possible rewards.

If you would like more information, or have a potential case, contact us for a confidential consultation.

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Read IRS Whistleblower Office Announces New Multi-Year Operating Plan to Advance the Whistleblower Program at constantinecannon.com