Can’t Wait?

Section 7623(b) applies to new information not in the possession of the IRS on or after December 20, 2006. Supplemental or resubmitted information will not be considered for purposes of section 7623(b) unless its receipt prompts the IRS to take an administrative or judicial action that would not otherwise have been taken on the basis of the earlier-supplied information. Resubmission of information already in the possession of the Service prior to the date of enactment, does not qualify under 7623(b).

Under section 7623(b), awards will be paid in proportion to the value of information furnished voluntarily with respect to proceeds collected, including penalties, interest, additions to tax and additional amounts. The amount of any award will be at least 15%, but no more than 30%, of the collected proceeds in cases in which the Service determines that the information submitted by the whistleblower substantially contributed to the Service’s detection and recovery of tax.

If an action is based principally on allegations resulting from judicial or administrative hearings, government reports, hearings, audits, or investigations, or from the news media, an award of a lesser amount, subject to the discretion of the Whistleblower Office, may be provided; such an award, however, may not exceed 10% of the collected proceeds, including penalties, interest, additions to tax, and additional amounts resulting from the action.

If the whistleblower "planned and initiated" the actions that led to the underpayment of tax, or to the violation of the internal revenue laws, the Whistleblower Office may reduce the award. If the whistleblower is convicted of criminal conduct arising from his or her role in planning and initiating the action, the Whistleblower Office must deny any award.

Section 7623(b) applies with respect to any action in which the amount in dispute (taxes, penalties, interest, additions to tax, and additional amounts) exceeds $2 million. If the taxpayer is an individual, the individual's gross income must exceed $200,000 for any taxable year at issue in the action.

The law requires the Whistleblower Office to analyze 7623(b) claims, and authorizes the Whistleblower Office to request assistance from the whistleblower or their counsel.

Individuals are eligible for awards under 7623(b) based on collected proceeds, including penalties, interest, additions to tax, and additional amounts collected as a result of any administrative or judicial action resulting from the information provided.

If the thresholds in 7623(b) are not met, section 7623(a) authorizes, but does not require, the Service to pay for information relating to underpayments of tax that result in collection of proceeds.

The Whistleblower Office will inform the claimant in writing regarding any award decision or determination.