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Frequently Asked Questions

FAQ Topic: Tax Fraud

What is a qui tam whistleblower case?

A "qui tam" case is a lawsuit brought by a private person, but on behalf of the government, under the federal False Claims Act or similar state laws. Under the False Claims Act, the private person who brings the lawsuit is known as a "relator." Informally, the term “whistleblower” is often used, although that is a broader term that has meanings outside of the False Claims Act as well. If the government recovers money as a result of the qui tam lawsuit, then the relator is rewarded with a share of the recovered money (between 15% and 30%). The rest goes to the government.

What types of wrongdoing are covered by the tax whistleblower law?

The federal tax fraud whistleblower law covers both intentional and unintentional underpayment of taxes.  Accordingly, if you have information that a company of individual has either committed tax fraud, or has simply failed to pay the legally-owed amount of taxes, you may be able to bring a claim for a reward.

How do I file a tax fraud whistleblower claim?

If you have information concerning underpayment of federal taxes, the claim must be filed with the IRS Whistleblower Office, pursuant to procedures established by that office.  At a minimum, you must file an IRS Form 211, Application for Award of Original Information.  To make your claim stronger, however, you may wish to consult with a whistleblower attorney, and have the attorney prepare a more extensive filing that includes your evidence, and an explanation of the tax issues.

Are tax whistleblower claims confidential?

When you file a claim for a reward with the IRS Whistleblower Office, the IRS will keep your identity confidential to the fullest extent allowable under the law.  In most cases, this means that your identity will not be made public, or provided to the target of the investigation.  In rare cases, your claim could result in a civil or criminal lawsuit.  If that happens, the IRS does have the right to call you to testify as a witness, at which point your identity would become known to the defendant.  So, although the great majority of IRS whistleblowers will remain anonymous, that anonymity is not 100% guaranteed.

How much can I receive as a reward for blowing the whistle on tax fraud?

Under the federal tax fraud whistleblower law, if the amount of taxes, penalties and interests owed by the taxpayer exceeds $2 million (and a few other conditions are met), then a tax fraud whistleblower would be legally entitled to an award of at least 15%, up to a maximum of 30%.  If the amount at issue was $2 million or less, then the maximum award would be 15%, and would be discretionary with the IRS.

I don’t have enough money to pay for an attorney to represent me in my tax whistleblower case. How can I get legal help?

Tax fraud whistleblower cases can take many attorney hours to prepare and pursue. If you had to pay the attorneys on an hourly basis, the fees would become prohibitive to most potential whistleblowers.  But many attorneys who handle whistleblower cases, such as the whistleblower lawyers at Tycko & Zavareei LLP, are willing to do so for a "contingency fee."  This means that the attorneys do not charge by the hour for their time.  Instead, they agree to accept a percentage of your recovery as their fee, and they take on the risk that, if you do not obtain any recovery, they will not be paid.  Different qui tam attorneys may be willing to offer different terms. If you are seriously considering a tax whistleblower case, you may wish to contact a number of different qui tam law firms, and find one that you believe will do excellent work and that will offer you favorable contingency-fee terms.

To bring a tax whistleblower case, do I need to hire an attorney with an office near where I live or work?

No.  Finding a tax whistleblower attorney that you believe will effectively and aggressively represent your interests is much more important than finding one that is local.  Attorneys who handle tax fraud whistleblower cases routinely work on cases around the country, and not just in the city or state where they have offices.   And all tax whistleblower cases are filed with the IRS Whistleblower Office,, located in Washington, D.C.

How long will it take for the IRS to pay me a reward if I blow the whistle on tax fraud?

The IRS whistleblower process is quite slow.  The IRS does not pay an award until it has investigated the claim, assessed the taxes owed by the taxpayer, and then actually collected money from the taxpayer.  This process can take several years.

Can I bring a qui tam case under the False Claims Act for tax fraud?

The federal False Claims Act contains a specific exclusion for taxes owed to the federal government.  Accordingly, the only way to obtain a reward for blowing the whistle on federal tax fraud is to file a claim with the IRS Whistleblower Office.  However, some states—most notably New York—do permit private parties to bring lawsuits under state law to recover state taxes.  Accordingly, if you have information that a company or individual owes taxes to the State of New York, you may wish to consider bringing a lawsuit under the New York False Claims Act.