Once the Tax Relief and Health Care Act of 2006 was established, an entity known as the IRS Whistleblower Office was born. This organization is tasked with receiving tips from citizens who have seen tax issues within their workplace or any other facet of their lives. The amount of money that goes unreported annually for taxation is a major issue facing our economy. Becoming an IRS whistleblower can prove to beneficial for both the individual and the United States government. If you are considering taking on a qui tam lawsuit, it can prove to be very beneficial to work with a team of knowledgeable professionals to optimize the outcome of your actions. JDKatz is here to serve as your tax attorneys for Maryland and Washington D.C. residents. With a diverse team of experts, we are able to design a plan for your unique case.
IRS fraud reporting is enforced and rewarded in our country to root out and stop abusive tax schemes. Today, we’ll highlight the basics of becoming an IRS whistleblower. If you are in need of tax advice for how to proceed through this intensive process, be sure to contact our legal team today!
IRS Awards
The Internal Revenue Service aims to offer considerable incentives to make the difficult whistleblowing process more worthwhile for individuals contemplating making a report. It’s important to know that these rewards are given for founded information, not unsupported speculation. Individuals will need reliable information, and data if possible. The IRS is also very strict in regards to the motivation behind your whistleblowing. Personal disputes between business partners should not be the motivation for coming forward. As such, their guidelines are set forth to seek out tax issues that are significant in nature, typically valued at at least $2 million to be considered for an award. Payments are given once the investation is complete and all of the funds are collected. Even if your information was pivotal in enforcing the proper tax evasion penalties, no reward will be given until the case is closed.
Award Types
Awards are divided into two groups, and are only given if the correct criteria are met. As we have stated, tax disputes should generally be at least $2 million to qualify for an award. If the case is brought against an individual, their annual gross income must be at least $200,000. Once the case is settled, the IRS will pay out between 15 and 30 percent to the whistleblower that brought the case forth. This amount is determined by the total amount collected by the government once the case is done. If the IRS whistleblower feels that they were not properly rewarded, they can appeal to the U.S. Tax Court for a higher amount.
A second program is available for those who bring information forth on cases that do not meet the minimums, such as the individual’s income or the the total tax discrepancy amount. While the rewards aren’t as large for whistleblowers, a 15 percent reward is offered. It’s important to remember that these rewards are given at the government’s discretion, and the individual who brought the case forth cannot dispute the outcome.
Reduced Awards
If the whistleblower is found to be the originator of the tax fraud, the reward may be reduced or denied entirely. Individuals who take part in an illegal enterprise cannot expect equal compensation after bringing forth their own indiscretions. If the information a whistleblower brings forth has already been disclosed, then the reward may be reduced as a result.
Updated Incentives
Before the tax relief act was enacted in 2006, IRS whistleblowers were rarely paid to report tax fraud. There were no guidelines in place to dictate when and how much should be given. If you were able to receive compensation for your efforts, the amount would typically range between 1 and 15 percent. Additional efforts have been made to ensure the utmost confidentiality for IRS whistleblowers. Coming forward and illuminating tax fraud can be intimidating, making the need to keep your identity a secret a vital part of the overall process.
The IRS has taken a strong stance against tax fraud. Their incentives for IRS whistleblowers help to illuminate how important it is to clean up our tax system. If you have information that can be beneficial for a tax fraud investigation, be sure to bring on professional help. Our tax attorneys in Maryland have the experience needed to help make your qui tam lawsuit as seamless as possible. Contact us today to see how we can help.
