Whistleblower Not Entitled to Money Award

Posted on June 26, 2020

The IRS has a Whistleblower program that can pay the whistleblower at least 15% and up to 30% of the proceeds collected as a result of the whistleblower turning somebody in to the IRS. If you know of a taxpayer that has unfiled tax returns or unpaid liability, and if you otherwise meet the terms of the Whistleblower program, the IRS can pay an award to you. In a recent case, however, the IRS denied an award to a Whistleblower. The Whistleblower filed a Form 211, Application for Award for Original Information, alleging that a corporate taxpayer had failed to file its federal Form 1120 income tax returns and to pay the associated tax liability. Although this was true, the corporation later filed the delinquent returns using estimated numbers. The IRS later conducted an audit of the tax returns and found that the expenses were properly substantiated and deducted. As a result, the IRS did not assess any additional tax, penalties or interest against the corporation. The IRS then denied the Whistleblower’s claim for an award. The Whistleblower, unhappy at getting stiffed, filed a lawsuit against the IRS in the Tax Court. Unfortunately, the Tax Court could not help the taxpayer, stating that it lacked jurisdiction to review the IRS’ decision to deny the Whistleblower’s claim for an award.

Do you know an individual or business that has not filed tax returns or has filed untruthful tax returns? If yes, you may be entitled to an award from the IRS if you are willing to blow the whistle.