 |
25.2.1.1
(12-23-2008)
Overview: Authority and Policy
-
The Information and Whistleblower Awards IRM provides procedures and guidance for all service personnel and must be strictly
adhered to. Any deviation from this IRM must be approved by the Headquarters Office. This section explains the procedures
used by the Service when information concerning an alleged violation of federal tax laws is received. The Service always welcomes
the receipt of information that indicates a taxpayer has or is violating the Federal tax laws.
-
On December 20, 2006, the Tax Relief and Health Care Act of 2006 was enacted. Section 406 of the Act amends section 7623 of
the Internal Revenue Code concerning the payment of awards to whistleblowers. The amendment made significant changes to the
whistleblower program and also required the establishment of a Whistleblower Office within the Internal Revenue Service that
has responsibility for the administration of the award program.
-
The IRS has generally referred to persons who submit information under section 7623 as "informants,"
and referred to the program as the "Informant Claims Program."
The IRS has also referred to such persons as "claimants"
in published guidance and the law now refers to the"Whistleblower Office"
and "whistleblower program."
Accordingly, the terms, "claimant"
and "whistleblower "
will be used in this IRM except where the term "informant "
appears in an office title or published document. However, no legal significance should be inferred based solely on the
use of these terms in this IRM.
-
The 2006 amendments re-designated the prior section 7623 as section 7623(a), which now includes interest in the collected
proceeds, added new provisions as section 7623(b), and included program administration requirements that were not incorporated
into the Internal Revenue Code. The application of new section 7623(b) is limited by certain dollar thresholds. To be eligible
for an award under section 7623(b), the tax, penalties, interest, additions to tax, and additional amounts in dispute must
exceed in the aggregate $2,000,000. If the taxpayer is an individual, the individual’s gross income must exceed $200,000 for
any taxable year at issue.
Note:
If the thresholds in 7623(b)(5) are not met, section 7623(a) authorizes, but does not require the Service to pay for information
that results in the government’s recovery of taxes, penalties, interest, additions to tax, and additional amounts.
-
The requirement that claims be paid from collected proceeds generally means that payment cannot be made for several years
after the information is submitted, because the underlying taxpayer’s case (including any appeals) must be resolved.
-
Effective July 1, 2008, the decision on the payment of an award and the percentage of the award, including those under section
7623(a), will be made by the Director, Whistleblower Office. The authority of the Director of the IRS Whistleblower Office
to make determinations under section 7623 does not affect the delegation of authority for determinations regarding the payment
of whistleblower expenses from confidential funds available to the Chief, Criminal Investigations.
|
|
|
