General Information about the Whistle Blower Program of IRS
1.
Under section 7623(b), awards will be paid in proportion to the value of information furnished voluntarily with respect to proceeds collected, including penalties, interest, additions to tax and additional amounts. The amount of any award will be at least 15%, but no more than 30%, of the collected proceeds in cases in which the Service determines that the information submitted by the whistle blower substantially contributed to the Service. detection and recovery of tax.
2.
If an action is based principally on allegations resulting from judicial or administrative hearings, government reports, hearings, audits, or investigations, or from the news media, an award of a lesser amount, subject to the discretion of the Whistleblower Office, may be provided; such an award, however, may not exceed 10% of the collected proceeds, including penalties, interest, additions to tax, and additional amounts resulting from the action.
3.
If the whistleblower “planned and initiated” the actions that led to the underpayment of tax, or to the violation of the internal revenue laws, the Whistleblower Office may reduce the award. If the whistleblower is convicted of criminal conduct arising from his or her role in planning and initiating the action, the Whistleblower Office must deny any award.
4.
Section 7623(b) applies with respect to any action in which the amount in dispute (taxes, penalties, interest, additions to tax, and additional amounts) exceeds $2 million. If the taxpayer is an individual, the individuals gross income must exceed $200,000 for any taxable year at issue in the action.
5.
Individuals are eligible for awards under 7623(b) based on collected proceeds, including penalties, interest, additions to tax, and additional amounts collected as a result of any administrative or judicial action resulting from the information provided.
6.
The Whistle blower Office will inform the claimant in writing regarding any award decision or determination.
Submission of Information for Award under Sections 7623(a) or (b)
1.
Individuals submitting information must complete IRS Form 211, Application for Award for Original Information. It is available on line.
Internal Revenue Service
Whistleblower Office
SE: WO
1111 Constitution Ave., NW
Washington, D.C. 20224
2.
Information submitted under section 7623 must be accompanied by an original signed declaration under penalty of perjury, as follows:
I declare, under penalty of perjury, that I have examined this application and my accompanying statement and supporting documentation and aver that such application is true, correct and complete, to the best of my knowledge.
3.
The requirement to submit information under penalty of perjury precludes submissions by:
1.
a person serving as a representative of the claimant, or
2.
an entity other than a natural person.
4.
The requirement to submit information under penalty of perjury also precludes submissions made anonymously or under an alias. Until further guidance is issued, claims for awards may not be submitted electronically or by fax.
5.
Joint claims must be signed by each claimant and each claimant must sign the claim under penalty of perjury.
6.
Some whistleblower submissions present legal and policy issues that can preclude the use of some or all of the information offered by the whistleblower. Whistleblowers may also mistakenly submit claims for award directly to Service field personnel, despite instructions to send all Forms 211 to the Whistleblower Office. In such cases, to protect the integrity of any taxpayer investigation or examination, Service personnel should not act on the underlying tax noncompliance issue presented by the whistleblower prior to forwarding the claim to the Whistleblower Office. Any and all information should be forwarded to the Whistleblower Office.
7.
A whistleblower may be represented by counsel during any proceeding by filing a properly executed Form 2848, Power of Attorney and Declaration of Representative.
8.
If available information is not provided by the claimant, the claimant bears the risk that such information may not be considered by the Whistleblower Office in making any award decision or determination. If documents or supporting evidence are known to the claimant but are not in his or her possession or control, the claimant should describe these documents and identify their location to the best of his or her ability.
Information that IRS wants to be included with IRS” Form 211″
1.
The Form 211 must be completed in its entirety and should include the following information:
1.
The date the claimant submits the claim;
2.
Claimant’s name;
3.
Name of claimants spouse (if applicable);
4.
Claimant’s contact information, including address with zip code and telephone number;
5.
Claimant’s date of birth;
6.
Claimant’s Taxpayer Identification Number (e.g., Social Security Number or Individual Taxpayer Identification Number) and Taxpayer Identification Number of claimants spouse, if applicable.
2.
In addition to the information shown above, the Form 211 must include specific and credible information concerning the person(s) that the claimant believes will lead to the collection of unpaid taxes. This information should include the following:
1.
The legal name of the person(s) (e.g., individual or entity), and any related person(s), that failed to pay taxes;
2.
The person’s aliases, if any;
3.
The person’s address;
4.
The person’s Taxpayer Identification Number(s);
5.
A description of the amount(s) and tax year(s) of Federal tax claimed to be owed, and facts supporting the basis for the amount(s) claimed to be owed;
6.
Documentation to substantiate the claim (e.g., financial data; the location of bank accounts, assets, books, and records; transaction documents or analyses relevant to the claim); and
7.
Any and all other facts and information pertaining to the claim.
3.
Finally, the Form 211 must include an explanation of how the information that forms the basis of the claim came to the attention of the claimant, including the date(s) on which this information was acquired, and a complete description of the claimants present or former relationship (if any) to the person that is the subject of the claim (e.g., family member, acquaintance, client, employee, accountant, lawyer, bookkeeper, customer). If the claimant identifies multiple person(s) as the subject of a claim, describe his or her relationship to each person.
Processing of the Form 211 7623(a) Claim for Award if your claim is below $2 million dollars
1.
If it is determined that a whistleblowers claim is below the $2 million threshold of section 7623(b), it will be forwarded by the Whistleblower Office to:
Internal Revenue Compliance Center
Informants Claims Unit (ICE)
1973 N. Rulon White Blvd.
MS 4110 ? ICE
Ogden, UT 84404
2.
Upon receipt of the information, the Informant Claims Unit will determine whether the application is complete. If all the necessary information is present, the Informant Claims Unit will input the claim information onto the database and notify the whistleblower and/or representative of the receipt of the information and claim number. The whistleblower will be notified that if an investigation is initiated, it could take several years until final resolution of all tax matters, and at the conclusion of their review, they will only be able to tell whether or not the information provided met the criteria for an award.
3.
If the submission is incomplete, the whistleblower will be contacted by the Informant Claims Unit to obtain the missing information. If no response is received within 45 days, the claim will be dismissed. If multiple entities are listed on a single Form 211, each entity will receive a claim number and the whistleblower will be notified.
4.
In claims where a whistleblower submits more than one Form 211, each Form 211 will receive a claim number and the whistleblower will be notified of the claim number associated with each form. If multiple entities are listed on a single Form 211, each entity will receive a claim number and the whistleblower will be notified.
5.
The claim file will be forwarded for classification to the appropriate Operating Division. The Operating Division classifier will review the information to determine the following:
1.
Will the information provided materially contribute to identification, development or resolution of taxpayer liability or collection?
2.
Is the taxpayer currently under audit?
3.
Does the whistleblower offer information that may be relevant to exam issues (past, current or prospective)?
4.
Does the whistleblower offer information that may be relevant to collection issues (past, current or prospective)?
When claims are submitted on multiple taxpayers (whether on one Form 211 or multiple forms), all claims will be forwarded to classification at the same time.
6.
Whistleblowers whose claims do not meet the criteria for an award are sent a 1010 Letter.
7.
If classifier determines that the whistleblowers information warrants referral for examination, the Informant Claims Unit will establish the case on AIMS, input an ICE indicator on each return established on AIMS for tracking purposes and forward a copy of Form 211, Application for Award for Original Information, supporting allegations, returns requested by the classifier for alleged tax violator and an evaluation package, Form 11369, to the appropriate group or subject matter expert in accordance with the operating divisions? instructions.
1.
Whistleblowers? communications are confidential. All whistleblower claims, reports and information shall be transmitted in a double sealed confidential envelope marked “To Be Opened By Addressee Only” with Document 6441 as the cover sheet.
8.
If at any time the amount in dispute (taxes, penalties, interest, additions to tax, and additional amounts) rises to $2 million or more, the Whistleblower Office must be notified immediately at WO@irs.gov. The law provides that awards will be paid from collected proceeds and from “related actions.” If the initial IRS action on the whistleblowers information is expanded to include additional taxpayers or modules, AIMs controls are required for those additional taxpayers or modules. The Informant Claims Unit should be contacted to have the “1” indicator added to any additional taxpayers or modules. Contact the Whistleblower Office for guidance. Additional taxpayers or modules may also raise the aggregate amount in dispute over $2 million requiring contact with the Whistleblower Office.
9.
The Whistleblower Office will be notified once the award claim file is received in the Informant Claims Unit. The entire award claim file will be reviewed by the Whistleblower Office for an award decision. During the review by the Whistleblower Office, it may be necessary to contact the RA/SA/RO team to obtain additional information or to visit the team to review related files. Communication protocol developed between the Operating Divisions and the Whistleblower Office will be followed regarding how the team will be contacted.
10.
Once an award decision is made, the whistleblower will be notified by the Director, Whistleblower Office.
Award Computation
1.
The Director of the Whistleblower Office assumed the responsibility for all award determinations and percentages. Claims will be considered under the law and policies in place at the time the information was submitted. Supplemental information will not be considered as a new claim unless its receipt prompts the IRS to take an administrative or judicial action that would not otherwise have been taken on the basis of the earlier-supplied information.
Award Computation – Section 7623(a)
1.
If the amount in dispute is less than $2 million and if the taxpayer is an individual, the individual’s gross income must be below $200,000 for all tax years at issue, the Service will pay awards to whistleblowers as follows:
1.
For specific and responsible information that caused the investigation or, in claim files already under audit, materially assisted in the development or identification of an issue or issues and resulted in the recovery, or was a direct factor in the recovery, the award shall be 15 percent of the amounts recovered, with the total award not exceeding $10 million.
2.
For information that caused the investigation or, in claim files already under audit, caused an investigation of an issue or issues, and was of value in the determination of tax liabilities although not specific, the award shall be 10 percent of the amount recovered, with the total award not exceeding $10 million.
3.
For information that causes the investigation or investigation of an issue, but had no direct relationship to the determination of tax liabilities, the award shall be 1 percent of the amounts recovered, with the total award not exceeding $10 million. No award will be paid if the recovery was so small as to call for payment of less than $100.00 under the above formulas.
4.
In a claim file when two or more whistleblowers individually provided original information leading to the recovery of additional tax, penalties, and fines from the same taxpayer, each whistleblowers claim for award should be judged on its own merits. The individual awards should be considered in accordance with the criteria, computation formulas, and limitations stated above.
Award Computation – Section 7623(b)
1.
Awards will be paid in proportion to the value of information furnished voluntarily with respect to proceeds collected, including taxes, penalties, interest, additions to tax and additional amounts. The amount of the award will be at least 15% but no more than 30% of the collected proceeds in claim files in which the Whistleblower Office determines that the information submitted by the whistleblower substantially contributed to the IRS? detection and recovery of taxes, penalties, interest, additions to tax, and additional amounts. If the whistleblower planned and initiated the actions that led to the underpayment of tax or detection and bringing to trial and punishment of persons guilty of violating the internal revenue laws or conniving at the same, the Whistleblower Office may reduce the award. (Further guidance will be forth coming.)
Funding Rewards
1.
Whistleblower awards are paid out of taxes, penalties, and fines collected by reason of the information provided, as authorized by Internal Revenue Code section 7623, as amended by section 1209 of the Taxpayer Bill of Rights 2, Public Law 104.4?168.
2.
Awards are paid out of the proceeds collected, including penalties, interest, additions to tax and additional amounts.
3.
Claims for Award are paid as soon as administratively possible.
Appeal Rights under section 7623(b)
1.
Once the Whistleblower Office has made a final determination regarding a claim, the Whistleblower Office will communicate the determination, in writing, to the claimant. Final Whistleblower Office determinations regarding awards under section 7623(b) may, within 30 days of such determination, be appealed to the United States Tax Court. In accordance with section 7623(b) (4), decisions under section 7623(a) may not be appealed to the Tax Court.