Update: The IRS Whistleblower Program

Awards

Whistleblowers who provide information pursuant to Section 7623(b) are eligible to receive an award of at least 15%, but not more than 30%, of the collected proceeds. I.R.C. ' 7623(b)(1). The exact amount of an award is determined by the IRS's Whistleblower Office, and the determination is based on the extent to which the informant “substantially” contributed to the action. Id. In very specific circumstances, awards can be less than 15%, and in certain cases entirely disallowed. For example, where the information provided is based on certain public sources, the Whistleblower Office may (but is not required to) issue an award that does not exceed 10% of the collected proceeds. I.R.C. ' 7623(b)(2). Additionally, the Whistleblower Office may reduce the award if the whistleblower is someone who “planned and initiated the planning that led to the underpayment of tax”; and an award is prohibited if the whistleblower is convicted of a crime arising out of such conduct. I.R.C. ' 7623(b)(3). (In his Sept. 13, 2011, letter to the IRS Commissioner, Sen. Charles Grassley (R-IA), a drafter of the new law, noted that “limitations for planners and initiators was intended to apply to the chief architect or the chief wrongdoer,” and criticized the IRS's attempts, in IRM 25.2.2.9.2.13.C, to categorize a whistleblower's role as a “planner and initiator as significant, moderate, or minimal.” (emphasis in original; Letter available at www.grassley.senate.gov/about/upload/Shulman-re-IRS-9-13-11.pdf).