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Whistleblowers and the IRS Whistleblower Program have been vital in promoting fairness and accountability within the nation's tax administration. As of June 2025, the IRS has paid over $1.3 billion awards based on the successful collection of $7.5 billion in restitution from noncompliant taxpayers, since issuing its first award in 2007. In Fiscal Year 2024, the IRS paid awards totaling $123.5 million based on whistleblower information on tax and other amounts collected of $474.7 million. In that same year, the Whistleblower Office established 14,926 award claims, an increase of 13% compared to the average of the previous four years.
This milestone is significant for financial and tax fraud enforcement, as it demonstrates how important the whistleblower community and their submissions are to the IRS. This accomplishment also demonstrates how effective the IRS has been in finding actionable claims with timely, specific, significant, and credible information.
What is the IRS Whistleblower Program?
The IRS Whistleblower Office pays monetary awards to eligible individuals whose information is used by the IRS in an investigation. Awards are only issued once a final determination is made, and the percentage is usually between 15 and 30 of the proceeds collected and attributed to the whistleblower's information, and after the taxpayer has utilized all appeal rights or claim filings for refunds.
The program was made to enforce compliance and reduce the tax gap by acknowledging whistleblowers, taxpayers, and other stakeholders. To do this, the IRS receives and considers specific, timely, and credible whistleblower claims identifying non-compliance with tax laws or other laws that the IRS is authorized to enforce or investigate.
Who Can File a Whistleblower Claim with the IRS?
Any individual is eligible, other than those described below, to file a claim for award, and to receive an award, under section 7623 of the Internal Revenue Code.
These individuals are not eligible to file a claim for award:
- Employees, or former employees, of the Department of Treasury
- Any individual who has obtained their information through their official duties as a federal government employee
- Any individual who is/was required by federal law or regulation to disclose their information or was prevented by federal law/regulation from disclosing information
- Any individual who (had) obtained the information based on a contract with the federal government
- Any individual who filed a claim for award based on information obtained from an ineligible whistleblower
What protections are available to IRS whistleblowers?
The IRS maintains the safety of all whistleblowers through various protective measures. A key protection for whistleblowers is keeping their identities confidential when providing evidence of wrongdoing. Along with this, there are various remedies for retaliation against IRS whistleblowers. To deter retaliation, these remedies include:
- Back pay: wages and benefits lost because of being unlawfully terminated
- Reinstatement to the whistleblower's former job
- Front pay: wages and benefits to cover the time needed to find a new job
- Out of pocket losses
- Damages for pain and suffering
- Punitive damages
How does the IRS program differ from the False Claims Act?
The IRS program is significant because the False Claims Act is not applicable to claims made under the Internal Revenue Code. The application for reporting fraud under IRS Whistleblower program is substantially different than the FCA. One primary example is the fact that whistleblower reports under the IRS Whistleblower law are not raised in a lawsuit filed in federal court. Instead, whistleblower reports are managed by the IRS Whistleblower Office and disputes can be appealed to the Tax Court.
The IRS Whistleblower program also applies, in the case of individual taxpayers, only to those individuals with a gross income above $200,000 for the taxable year, and when the tax, penalties, interest, additions to tax, and additional disputed amounts exceed $2 million. Along with this, the role of the whistleblower is more hands-off in the IRS program, acting solely as the informant as opposed to plaintiff/relator in a FCA case.
Additionally, the IRS program has a strong emphasis on tax fraud and underpayment of federal taxes, which the False Claims Act pertains to any fraud involving false claims submitted to the federal government for payment.
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