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IRS Reports a New Record $312 Million in Whistleblower Awards

The Internal Revenue Service (IRS) released a report in February providing an overview of its whistleblower program in what was a record-breaking year. Whistleblowers provided information during 2018 that aided in the agency’s recovery of more than $1.44 billion throughout the year, resulting in a total of $312 million awarded to those whistleblowers. This number represented nearly a tenfold increase from the $33.9 million the IRS handed out to whistleblowers after the 2017 fiscal year.

There were 217 total awards provided to whistleblowers by the IRS in Fiscal Year 2018, 31 of which were mandatory awards under IRS Code section 7623(b), and another 186 of which were discretionary awards under section 7623(a). The average award percentage was 21.7 percent, which also represented an increase from the previous two years (16.6 percent in 2016, 17.8 percent in 2017).

Expect more successful years to come for the IRS whistleblower program

The director of the IRS Whistleblower Office pointed to several improvements in the agency’s whistleblower program that helped make it a record year, including offering whistleblowers information about their pending claims earlier on through Preliminary Reward Recommendation Letters (PARLs). The addition of Internal Revenue Code section 7623(c) was also a difference maker, as it defined “proceeds” more broadly for the purposes of whistleblower awards to include interest, penalties, tax additions, and any additional amounts provided under internal revenue laws, as well as money from civil forfeitures and criminal fines.

The program differs from the whistleblower programs run by the Securities & Exchange Commission and Commodity Futures Trading Commission in that it does not offer anti-retaliation protections to whistleblowers. However, the IRS director has written to congress in his report on the program stating the agency’s whistleblowers should be given a “zone of protection from economic or physical harm” to ensure the continued success of the program.

For further guidance on filing a report through the IRS whistleblower program, work with an experienced attorney at Kardell Law Group.

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