Understanding the IRS Tax Whistleblower Program

Underreporting of Income

Failing to disclose all income earned in order to reduce taxable income.

Fraudulent Deductions or Credits

Claiming deductions, exemptions, or tax credits that are not legally permissible.

Offshore Tax Evasion

Using undisclosed foreign bank accounts, trusts, or shell companies to hide income or assets from the IRS.

Employment Tax Fraud

Misclassifying employees as independent contractors or failing to remit payroll taxes withheld from employees’ wages.

Corporate Tax Schemes

Engaging in transfer pricing manipulation, sham transactions, or other accounting strategies to avoid tax liability.

Under the Section 7623(b) Program, whistleblowers may receive 15–30% of the collected proceeds (including penalties, interest, and additions to tax) if:

• The amount in dispute exceeds $2 million, and;
• For individual taxpayers, their gross income exceeds $200,000 for at least one tax year involved in the case.

The IRS also operates a Section 7623(a) Program for smaller cases, which allows for discretionary awards but does not guarantee a set percentage.

The IRS strives to protect whistleblower confidentiality during investigations, but complete anonymity is not guaranteed. Whistleblowers may submit claims anonymously if represented by an attorney.
Retaliation protections for tax whistleblowers are generally governed by federal whistleblower laws and, in some cases, by other employment retaliation statutes. Remedies may include:

• Reinstatement
• Back pay
• Compensation for other damages

To qualify for an award, whistleblowers must:

• Submit Form 211 (Application for Award for Original Information) to the IRS Whistleblower Office.
• Provide specific, credible, and original information about a tax violation.
• Cooperate with IRS investigators if requested.

In addition to the IRS Tax Whistleblower Program, several other federal and international whistleblower programs provide significant rewards and protections:

SEC Securities Whistleblower Program

Rewards whistleblowers for reporting violations of federal securities laws, such as insider trading, accounting fraud, and market manipulation.

CFTC Commodities Whistleblower Program

Encourages reporting of misconduct in the commodities, futures, options, and swaps markets.

FIRREA (Financial Institutions Reform, Recovery, and Enforcement Act) Program

Targets fraud affecting federally insured financial institutions, including mortgage and loan origination fraud.

AML & FCPA Whistleblower Program

Addresses money laundering and foreign bribery under the Anti‑Money Laundering Act and the Foreign Corrupt Practices Act.

International Whistleblower Claims

Allows foreign whistleblowers to qualify for U.S. whistleblower program awards in cases with cross‑border misconduct tied to U.S. markets or entities.