Report your tax dodging ex to the IRS and collect a reward
If you know someone who’s dodging their taxes, you can report them to the IRS and potentially get a reward for it. The IRS Whistleblower Office offers monetary awards to people who provide information that helps the IRS. The amount you can get ranges from 15 to 30 percent of the money collected based on your information. However, you won’t get paid until the IRS has made a final decision and the taxpayer has no more options to appeal or claim a refund.
Individuals use IRS Form 211, Application for Award for Original Information, to submit allegations of tax noncompliance. The form should include:
- A written narrative describing the alleged noncompliance.
- Supporting information like books, records, receipts, bank records, or emails.
- Details on any supporting evidence not in possession and its location.
- Explanation of how and when the whistleblower learned about the issue.
- Description of any relationship with the subject of the claim (e.g., family member, employee).
- Whistleblower’s signature under penalty of perjury and date.
Individuals must then mail the Form 211 with supporting documentation to:
Internal Revenue Service
Whistleblower Office – ICE
1973 N Rulon White Blvd.
M/S 4110
Ogden, UT 84404
Who is eligible to file a claim for award?
Anyone not listed below can file a claim and receive an award under section 7623. The Whistleblower Office will reject claims from ineligible whistleblowers and provide written notice of the rejection. Ineligible individuals include:
- Employees of the Department of Treasury or those who were employees when they obtained the information.
- Federal government employees who gained the information through official duties.
- Individuals required or prohibited by federal law or regulation to disclose the information.
- Those with access to the information through a federal government contract.
- Individuals filing claims based on information from ineligible whistleblowers to circumvent rejection.
What are the rules for getting an award?
Internal Revenue Code (IRC) section 7623 provides provisions for awards, sometimes mandatory, when the Internal Revenue Service (IRS) takes action based on information from a whistleblower. Claims that offer specific and credible information regarding tax underpayments or violations of internal revenue laws that lead to collected proceeds may qualify for an award.
The Bipartisan Budget Act of 2018 expanded the definition of proceeds to include penalties, interest, additions to tax, and additional amounts under internal revenue laws, as well as any proceeds arising from laws the IRS is authorized to administer, enforce, or investigate. This encompasses criminal fines, civil forfeitures, and violations of reporting requirements.
Generally, the IRS will pay an award of at least 15 percent, but not more than 30 percent, of the proceeds collected attributable to the whistleblower’s information. The percentage decreases if the claim is based on public sources or if the whistleblower planned and initiated the noncompliance actions. Awards are processed as either a section 7623(a) or 7623(b) award.
To qualify for the IRC section 7623(b) award program, the information must:
- Relate to a tax noncompliance matter where the tax, penalties, interest, additions to tax, and additional proceeds in dispute exceed $2,000,000; and
- Relate to a taxpayer, specifically for individual taxpayers, one whose gross income exceeds $200,000 for at least one of the tax years in question.
If a submission does not meet the criteria for IRC section 7623(b), the IRS will consider it for the discretionary program under IRC section 7623(a) of the Code.
Know Someone Who is Not Paying Their Income Tax? The IRS Will Pay You to Tattle
In an effort to encourage you to turn in tax evaders, the IRS is offering a pretty nice cash incentive.
From the IRS:
The IRS Whistleblower Office pays money to people who blow the whistle on persons who fail to pay the tax that they owe. If the IRS uses information provided by the whistleblower, it can award the whistleblower up to 30 percent of the additional tax, penalty and other amounts it collects.
Who can get an award?
The IRS may pay awards to people who provide specific and credible information to the IRS if the information results in the collection of taxes, penalties, interest or other amounts from the noncompliant taxpayer.
The IRS is looking for solid information, not an “educated guess” or unsupported speculation. We are also looking for a significant Federal tax issue – this is not a program for resolving personal problems or disputes about a business relationship.
What are the rules for getting an award?
The law provides for two types of awards. If the taxes, penalties, interest and other amounts in dispute exceed $2 million, and a few other qualifications are met, the IRS will pay 15 percent to 30 percent of the amount collected. If the case deals with an individual, his or her annual gross income must be more than $200,000. If the whistleblower disagrees with the outcome of the claim, he or she can appeal to the Tax Court. These rules are found at Internal Revenue Code IRC Section 7623(b) – Whistleblower Rules.
The IRS also has an award program for other whistleblowers – generally those who do not meet the dollar thresholds of $2 million in dispute or cases involving individual taxpayers with gross income of less that $200,000. The awards through this program are less, with a maximum award of 15 percent up to $10 million. In addition, the awards are discretionary and the informant cannot dispute the outcome of the claim in Tax Court. The rules for these cases are found at Internal Revenue Code IRC Section 7623(a) – Informant Claims Program, and some of the rules are different from those that apply to cases involving more than $2 million.
If you decide to submit information and seek an award for doing so, use IRS Form 211. The same form is used for both award programs.
More Information
What Happens to a Claim for an Informant Award (Whistleblower)Procedures used and the criteria followed to identify and process informant cases
History of the Whistleblower/Informant ProgramHistorical information on the evolution of the concept of paying for leads from its inception up to the current law followed today
Whistleblower LawA brief synopsis of what the new whistleblower law entails. This is the most significant change to the Services’ approach to informant awards in 140 years
How Do You File a Whistleblower Award ClaimStep by step procedures to follow to file an informant claim for award
Confidentiality and Disclosure for WhistleblowersThe rules governing confidentiality of informant information
IRC Section 7623(b) – Whistleblower RulesThe requirements of the new rules enacted in IRC Section 7623(b), the Whistleblower Program
IRC Section 7623(a) – Informant Claims ProgramThe requirement of the rules governing claims that do not meet the requirements of the provisions in the whistleblower program under IRC Section 7623(b). These claims are part of the Informant Claims Program
IRS Form 211Application for Award for Original Information
News Release IR-2007-201Procedure Unveiled for Reporting Violations of the Tax Law, Making Reward Claims
Notice 2008-4 Guidance to the public on how to file claimsClaims Submitted to the IRS Whistleblower Office under Section 7623
Whistleblower Office At-a-Glance
2008 Report to Congress on the Whistleblower Program
Reporting other information to the IRS
If you have information about tax noncompliance but are not interested in an award, or you have other information you believe may be of interest to the IRS:
For information on how to Report Suspected Tax Fraud Activity, if you have information about an individual or company you suspect is not complying with the tax law, and you do not want to seek an award . You can remain anonymous
The IRS sets professional standards for attorneys, certified public accountants and enrolled agents who represent taxpayers before the IRS. To learn more about those professional standards, or how to report a violation, see Office of Professional Responsibility At-a-Glance – Report Circular 230 Violations – email OPR@irs.gov
Report Fraud, Waste and Abuse to Treasury Inspector General for Tax Administration (TIGTA), if you want to report, confidentially, misconduct, waste, fraud, or abuse by an IRS employee or a Tax Professional, you can call 1-800-366-4484 (1-800-877-8339 for TTY/TDD users). You can remain anonymous.
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