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What is the IRS Whistleblower Office?

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  • Written By: Mary McMahon
  • Edited By: Kristen Osborne
  • Last Modified Date: 05 November 2016
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The Internal Revenue Service (IRS) whistleblower office is an office at the agency responsible for collecting federal taxes in the United States where people with information about tax evasion can report it to IRS personnel. Depending on the nature of the situation, an IRS whistleblower may be entitled to a reward on the basis of how much money the agency was able to collect in response to the information. People can contact the office by telephone, mail, and email, and must provide credible and useful information, not simply vague tips or suspicions.

Collection of federal taxes in the United States is heavily reliant on a voluntary reporting system, with individuals and businesses filing tax documentation and using the declarations they make to determine their total tax liability. Compliance is generally very high across the United States, but there are cases where people and companies refuse to pay taxes or use fraudulent means to lower their tax bill. The IRS is particularly concerned with cases where large amounts of money are involved, and the IRS whistleblower program is designed to help it collect in these situations.

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If information provided by a member of the general public leads to the collection of $2 million United States Dollars (USD) or more, the IRS whistleblower can collect between 15% and 30% of that sum. Smaller collections may result in smaller rewards, or no rewards at all. In the past, the IRS has had a problem with people phoning in tips vindictively, with the goal of triggering an audit for revenge. The agency advises taxpayers about the purpose and limitations of the program to discourage this behavior, as launching tax investigations is expensive, and the agency wants to focus on large claims, not relatively minor tax evasion.

People making contact with the IRS whistleblower office need to provide name and contact information for the business or individual taxpayer, along with evidence of tax evasion. This could vary from a statement that a person with income in excess of $200,000 USD per year is not paying taxes to evidence of accounting fraud designed to keep tax liability as low as possible at a company. The IRS will follow up on the information and may collect funds, stop a refund, or mandate a resubmission of a tax return with accurate information.

After an IRS whistleblower submits information and the IRS collects, the agency will send a statement indicating how much money, if any, it is offering in reward. People generally have 30 days to appeal the reward if they feel it is not sufficient. The IRS has been accused by some whistleblowers of dragging its feet on reward money or ruling out rewards in some cases as a way of saving money.

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