IRS Whistleblower Program: Payouts Rise In 2012

On February 13, 2013, the IRS issued its "Fiscal Year 2012 Report to the Congress on the Use of Section 7623," as required by The Tax Relief and Health Care Act of 2006 (Act). The Act was established "to encourage people with knowledge of significant tax noncompliance to provide that information to the IRS."

The IRS is generally required to "pay awards if information an individual provides substantially contributes to the collection of tax, penalties, interest, and other amounts when the amounts in dispute are more than $2,000,000." The percentage awarded depends on the proceeds actually collected. Whistleblowers may also qualify for awards for information regarding significant tax non-compliance for "taxpayer[s] whose gross income exceeds $200,000 for at least one of the tax years in question."