The IRS Whistleblower Office noted and celebrated National Whistleblower Appreciation Day on July 30 by recognizing and documenting the decidedly significant role that whistleblowers play in tax justice and enforcement within the tax community.
Whistleblowers were burdened with the difficult task of regularly reporting tax evasion to the taxing country, relocating the same illegal trade from evasion into the taxing country's program jurisdiction as soon as the program was implemented. Through their act of persistence, whistleblowers have personally faced tangible consequences, which has enabled the IRS to recover billions of dollars from non-compliant taxpayers effectively.
Impact of the IRS Whistleblower Program (2007)
The IRS Whistleblower Program, beginning in 2007, has been a revenue-generating and quintessential tool in effectively resolving compliance cases with taxes in the system.
During its history, the program bountifully rewarded informants with the sum of more than $1.3 billion for tips submitted, which collectively had resulted in the collection of some $7.5 billion from tax delinquents since the program started almost two decades ago. These mind-boggling figures amply demonstrate the program's incredible and remarkable contribution to the tremendously important reduction in the tax gap, as well as its contribution to the generation of revenue by the government in a breathtaking manner.
Whistleblower tips brought historic levels of an eye-popping $474.7 million in the previous fiscal year, which was paid out in 2024. This award figure is historic, and it also shatters a historic figure of $123.5 million paid to those very courageous whistleblowers who dared to step forward and blow the whistle.
For the one year of these four, the Whistleblower Office received and processed just shy of 15,000 award claims, a staggering 13% over the four-year average. That increase certainly points to increased interest and involvement in the whistleblower program from the general public.
IRS Whistleblower Office: Strategic Vision and Modernization Initiatives
This move by the IRS Whistleblower Office to optimize productivity in total and take quality of service delivery to whistleblowers and other stakeholders to its best possible extent has been complemented by a high-profile case release and implementation of its first multi-year operating plan. Highlighted among some of the aggressive strategic goals are:
Claim Processing System
- Slowing down the processing rate would be achieved by creating and maintaining a special-purpose claim processing system for it.
Online Portal
- An individual filing portal online to keep things simple and allow whistleblower complaint submission and filing should also be available.
Direct Deposit
- The award payments will be significantly improved with the default and first preference of entering into direct deposit as well.
The rationale for such an additional move is to speed up and maximize overall system reactivity to a great degree. This would involve having whistleblowers' feedback and concerns heard on time, as well as initiating and adopting a greater degree of coordination and cooperation within the program.
Role and Importance of Whistleblowers in Tax Enforcement
Whistleblowers are a critically needed and important line of defense against the serious problem of tax evasion.
- Through concerted reporting on accurate, reliable, and timely information about different tax offenses, they are an integral part of the fight to close the tax gap, i.e., the difference between taxes due and taxes received.
- The whistleblower program is directed towards such excellent disclosure to the credit of financial incentives, not exceeding 15% or less than 30% of recovery, as and when valuable information is brought about by such brave citizens.
Acting Whistleblower Office
Erick Martinez placed the contribution value of whistleblowers, and to him, they are another guarantee of transparency and justice for tax administration. Also, he reflected that such courageous persons give the authority to the IRS to be even more forceful in the detection and struggle against noncompliance activity.
Historical Context: The Continuing Evolution and Expansion of Tax Whistleblower Law
National Whistleblower Appreciation Day is also used to commemorate and celebrate the signing into law on July 30, 1778, by the Continental Congress of the first-ever whistleblower law. The achievement was of landmark proportions in the protection of whistleblowers when they expose corruption or illegality.
It is an irony, though, that the United States did not move until March of 1867 to enact its first tax whistleblower law, which it enacted shortly shy of a complete 90 years after the enactment of the very first legislation protecting whistleblowers.
It has been successful because, though still growing and improving, the IRS Whistleblower Program of today, in large measure, is the result of the sweeping changes enacted in 2006. They led to mandatory payouts of funds only in attempting to safeguard whistleblowers in substantial tax cases, and further in the creation of greater incentives for people to offer useful information.
How the IRS Whistleblower Program Operates
The IRS Whistleblower Office must screen cautious cases before it receives information from taxpayers and other whistleblowers, i.e., who provide useful and helpful information about individuals or entities not in compliance with tax law or other laws applicable to the case.
In exchange, the whistleblower complaint must ultimately result in successful proceeds collection through the Internal Revenue Service. The process would then normally involve the following under ordinary circumstances:
A tip can usually be submitted on Form 211, also called Application for Award for Original Information.
- Determination of the value and credibility of a claim by the IRS.
- Constant investigations and varied collection operations exist, based on the intelligence that has been earned by the whistleblower.
- Determination of the award, submitted up to the level of proceeds obtained.
- The office provides an open and transparent forum for the whistleblowers, updating them on how their claims are handled and the award determination made.
Strengths and Weaknesses of the Whistleblower Program
The program emphasizes especially the encouragement and enforcement of the culture of good behavior within the corporation by offering a conducive environment where insiders will feel comfortable reporting any malpractice that they will be in a position to detect, since their security and confidentiality are assured.
Because of this massive strategy, identification of malpractice is not only facilitated but also tax evasion, as one very crucial element in deciding revenues for the public is evaded.
Overall, this is to increase the overall public's confidence in the justice and fairness of the overall tax system. Whistleblowers are generally, however, confronted with difficult ethical choices with both organizational allegiance and the public interest. Other than that, the IRS has continued to remain dedicated to continuous efforts to refine the program's effectiveness, accessibility, and fairness to better serve whistleblowers.
The Greater Implications of Whistleblowing in Governmental Language
Apart from acting as a tool of enforcement for tax law compliance, whistleblowing is a useful mechanism for the public sector and the private sector to uncover fraud, corruption, and other forms of criminal behavior. Whistleblowing gives birth to a culture of ethics and transparency and thus puts pressure on governments and institutions to be accountable and have high levels of ethical conduct.
Usage of different electronics, apart from improving the infrastructure for handling claims, will be highly useful in assisting the whistleblowers in submitting malpractice claims and compensating the whistleblowers in proportion to their services.
Helpful Links
- IRS Security Summit Summer Series 2025: Tax Professionals' Guide to Keeping Clients' Identity Secure
- Extension Filers: IRS Suggests Filing Early with Free File
- How Accountant Services Help U.S. Businesses Navigate IRS Regulations
- In addition, continuous updating of the policies, apart from regular interaction with the stakeholders, is carried out in order to attain maximum efficiency and effectiveness in the anti-tax evasion program, and greater compliance on the part of all the stakeholders with IRS Whistleblower Office.
