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Insights from the 2021 IRS Whistleblower Program Report

Date Published
Aug 02, 2022

The 2021 IRS Whistleblower Program Report was released on June 10, 2022 for Fiscal Year 2021 (FY 2021), which ran from October 1, 2020 through to September 31, 2021. The IRS Whistleblower Program Report details payouts made to whistleblowers throughout the fiscal year, as well as illustrates trends in reporting and the evolution of the program.

Because of the significant lag time between filing a whistleblower claim and ultimately collecting a payout, payments reflected in the 2021 IRS Whistleblower Report may relate to claims filed years earlier. This year’s report also underscores restructuring efforts made by the department in order to accommodate the continued growth of the program.

If you have information about tax evasion, non-payment, or fraud in the amount of over $2 million, you can become a whistleblower through the IRS Whistleblower Program. Reporting is anonymous and can net you between 15-30% of the total award attributable to your information. To come forward, contact a qualified IRS whistleblower lawyer today. The team at Tycko & Zavareei LLP can help you file the report and follow through to ensure that you receive payment.

IRS Whistleblower Program Developments

In FY 2021, the IRS Whistleblower Program underwent some strategic restructuring in order to accommodate the growth of the program. The Strategic Planning and Program Administration became Strategic Planning and Program Operations (SPPO), as well as the new sub-group Quality Assurance and Data Reporting (QADR). A new Deputy Director position was created to provide oversight for these groups.

2021 IRS Whistleblower Program Report Reveals Delays and Decreased Payouts

Since 2007, the IRS Whistleblower Office has collected $6.39 billion and has paid out $1.05 billion to whistleblowers in the form of rewards. In FY 2021 alone, the IRS made 179 whistleblower awards, totaling $36,144,926. This amount represents 14.7% of the total amount collected in missing tax payments by the program over the course of the fiscal year. The IRS Whistleblower Program recouped approximately $245 million from whistleblower tips overall in FY 2021.

While this amount seems high, it is, unfortunately, the lowest amount of money collected by the program as well as paid out to whistleblowers in four years. FY 2021’s whistleblower payments sit at about half of the average yearly total throughout the course of the program’s reported history. The $245 million collected in total is also disappointingly low. In comparison, in FY 2018, $1.44 billion was collected by the program thanks to tips from whistleblowers.

Finally, the 14.7% of the total amount collected in this fiscal year that was paid to whistleblowers illustrates a low rate of return. Under the IRS Whistleblower Program, whistleblowers can be eligible to receive up to 30% of the total amount recovered from a successful claim. Reasons for a reduced reward percentage might be:

  • Whistleblower partial liability in perpetrating the tax scheme
  • The total amount collected is not solely attributable to the whistleblower’s tip
  • The claim comes from information that may be attributable to public, and non-private, sources

Growing Backlog of Whistleblower Claims

The IRS Whistleblower Program was not immune to the effects of the coronavirus pandemic. In the first few pages of the report, issues such as slowdowns in intake processing, classification, payment processing, litigation, as well as general office closures are all cited in relation to the COVID-19 crisis. However, the IRS Whistleblower Program has been criticized in the past for delays in payment processing, as well as in collections based on tips. The FY 2021 IRS Whistleblower Report currently reveals an average 11-year processing period for claims.

The backlog of unprocessed and unpaid whistleblower claims has long plagued the program. Notably, in 2018 at least 23 whistleblowers died before they were able to collect the payouts owed to them from tips they gave to the program.

These significant delays are just another reason to report through a law firm if you have an IRS whistleblower claim. An experienced IRS whistleblower law firm can follow up on your claim over time, maintaining files and keeping tabs on the process. The tax fraud whistleblower lawyers at Tycko & Zavareei LLP understand the inner workings of the IRS Whistleblower Program and are ready and available to pursue your claim through to the end, helping to safeguard your rights as a whistleblower.

IRS Whistleblower Program Qualifications

According to the IRS, “one out of every six dollars owed in federal taxes is not paid.” Tax evasion, non-compliance, fraudulent reporting, and underpayment are all unfortunately common in today’s America. The IRS Whistleblower Program is an attempt to address these kinds of white collar crimes while rewarding those who come forward to report on efforts to defraud the federal government.

In order to qualify to make a claim through the IRS Whistleblower Program, you must meet the following criteria:

  • The tax non-compliance matter must involve at least $2 million in tax, penalties, interest, additions to tax, and additional proceeds
  • The taxpayer upon whom you are reporting must have a gross annual income of at least $200,000 for at least one of the years in question
  • You must not be an employee of the Department of the Treasury
  • You must not be an employee of the federal government or contractor with the federal government who received access to the information you are sharing in the scope of your professional duties

You do not have to be a US citizen to make a claim with the IRS Whistleblower Program, nor do you have to be currently located in the United States. You also do not have to be entirely without liability for the tax scheme in question. It is not impossible to report upon a larger fraud in which you yourself have become implicated. In these situations, it is advisable to contact an IRS whistleblower lawyer to ensure that your rights are fully protected during the reporting process.

Contact an IRS Whistleblower Lawyer Today

The IRS Whistleblower Program has had processing delays and reduced payouts over the course of the last fiscal year. However, the program is still a viable option to receive anywhere from 15-30% of a tax collection valued at over $2 million. If you have information about a tax non-compliance matter that may qualify you to become a whistleblower, use our online contact form to schedule a consultation with our legal team today. A consultation is complimentary and confidential.

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