Form 211 Rewards

The IRS’s Form 211 Reward Program allows whistleblowers to recover rewards.

Amount of Reward
Rewards range from 1% to 15% of amounts the IRS collects as a result of the whistleblowers information, including taxes, fines, and penalties, but not interest, up to a maximum of $10 million. 

Reward Determinations
The IRS has the discretion to determine whether a reward is appropriate and the amount of the reward. The IRS generally considers the following factors in making reward determinations:

• For specific and responsible information that caused the investigation or, in cases already under audit, materially assisted in the development of an issue or issues and resulted in the recovery, or was a direct factor in the recovery, the reward shall be 15 percent of the amounts the Service recovers, with the total reward not exceeding $10 million.
• For information that caused the investigation or, in cases already under audit, caused an investigation of an issue or issues, and was of value in the determina­tion of tax liabilities although not specific, the reward shall be 10 percent of the amounts the Service recovers, with the total reward not exceeding $10 million.
• For general information that caused the investigation or investigation of an issue or issues, but had no direct relationship to the determination of tax liabilities, the reward shall be 1 percent of the amounts the Service recovers, with the total reward not exceeding $10 million.
• A combination of reward rates may apply in certain cases: If the recovery is attributable to information that pertains to more than one of the above categories, the Service will apply the respective rates of reward.

The IRS can deny payment of a rewards for the following reasons:

• The information furnished by the informant was of no value.
• The IRS already knew the information or it was available in accessible public records.
• Where the IRS determines that the payment of a reward would be inappropriate; for example, when the whistleblower participated in the evasion scheme or prepared the return for the taxpayer with knowledge that taxes were being evaded.
• The whistleblower obtained, or furnished, the information while a Department of Treasury employee.
  The whistleblower obtained the information as part of his/her official duties as an employee of any other Federal agency.
• The whistleblower obtained or furnished the information while a State officer or member of a State body or commission having access to Federal returns, copies or abstracts.
• Payment would be contrary to State or local law.
• The IRS will not pay a reward if the recovery was so small as to call for payment of less than $100.00 under the above formulas.
  

Whistleblower Anonymity
The IRS has given formal assurances that it will not disclose the identity of whistleblowers to unauthorized persons.  There are, however, limited circumstances in which the identity of the whistleblower can become known. You should discuss these possibilities with your attorney or directly with the IRS. For instance, if a whistleblower is called to testify in a proceeding against the taxpayer, the fact that the whistleblower is entitled to a reward must be disclosed.

Eligibility for Reward
You are eligible to seek a reward unless:

• You were employed by the Department of the Treasury at the time you received or provided the Information; or
• You are a present or former federal employee who received the information in the course of your official duties.

An executor, administrator, or other legal representative may file a claim for reward on behalf of a decedent if the decedent was eligible to file such a claim before his or her death. The representative must attach to the claim evidence of authority to file it.

IRS Investigations
IRS investigations generally take years to complete. Rewards are generally not paid until an investigation is complete and taxes, penalties, fines and interests are paid, though in exceptional circumstances a partial reward can be paid before all monies are collected. A whistleblower should not anticipate receiving a reward in less than three years; though in exceptional circumstances rewards are sometimes obtained sooner.

Federal law prohibits the IRS from sharing with the whistleblower specific actions taken by the IRS with regard to the taxpayer.