In December, 2006, Congress dramatically increased the rewards that whistleblowers can receive from the IRS for reporting tax cheating. The new IRS Whistleblower Rewards Program authorizes the IRS to pay tax whistleblowers 15 to 30% of the government's recovery of unpaid taxes, interest, and penalties. The new IRS Whistleblower Rewards Program also permits payments of up to 10% of the government's recovery, even when the whistleblower is not an "original source" of the information.
Our whistleblower lawyers have already begun working with the IRS to present claims of whistleblowers in the new program. Qui Tam whistleblower cases under the False Claims Act can have tax issues that also qualify the whistleblower for the IRS rewards. These cases can include fraud in the Medicare or Medicaid programs or other health care fraud; fraud in the Hurricane Katrina disaster relief effort; fraud, waste and abuse in Iraq by government contractors; and fraud against state governments in Medicaid and other programs. The fraud connected to these cases often exceeds multi-millions of dollars.
The IRS has opened a new Whistleblower Office to handle these claims. This new IRS Whistleblower Rewards Program promises to be a great success.