Whistleblowers Take Their Cue

In the first year it was established, along with enhanced rewards for tips on large tax underpayments, the IRS Whistleblower Office received about 80 claims, the IRS said in a news release. About half the claims came in the last two-and-a-half months of 2007. They include a claim of $2 billion in December 2007, according to the Washington, D.C., law firm that filed it. The firm, the Ferraro Law Firm, said the claim broke the previous record of $1 billion, which it also submitted two months earlier.

Also in December, the Whistleblower Office’s first anniversary, the IRS provided interim guidance on claims and their filing in Notice 2008-4. Effective Dec. 20, 2006, the Tax Relief and Health Care Act of 2006 set rewards at between 15% and 30% (the previous maximum was 15%) of the proceeds collected (now including interest) in an action to which the tipster’s information substantially contributed. The amount of tax in dispute must exceed $2 million, and if the taxpayer is an individual, that person’s gross income for any taxable year in question must exceed $200,000.