Yes, you can get money for reporting tax fraud to the IRS Whistleblower Office, with awards typically 15–30% of the collected proceeds, but only if the information is specific, leads to significant recovery (over $2 million), and the taxpayer meets income thresholds, requiring you to file Form 211 for a monetary claim. Reporting general tax evasion with Form 3949-A does not qualify for a reward, only specific claims for awards are eligible for payment.
There are several US whistleblower reward laws that allow whistleblowers to get paid significant monetary rewards for reporting fraud, financial misconduct, and other wrongdoings.
Whistleblower claim for award
The office pays monetary awards to eligible individuals whose information is used by the IRS. The award amount generally is 15 to 30% of the proceeds collected and attributable to the whistleblower's information.
IRS Whistleblower Payouts
The IRS can pay 15% to 30% of the case recovery for mandatory awards, and up to 15% for discretionary awards. The IRS has averaged just over 20% paid to whistleblowers over the last 2 years.
The IRS $600 rule refers to a change in reporting requirements for third-party payment apps (like Venmo, PayPal) for taxable income from goods and services, where platforms must send a Form 1099-K if you receive over $600 in a year, intended to capture gig economy/side hustle income, though delays and phased implementation have adjusted the timeline, with current rules for 2024 using a higher threshold ($5,000) before fully phasing to $600 for future years, but remember all taxable income, regardless of form, must always be reported.
If you remain confidential, it may be more difficult to demonstrate that your employer knew about your whistleblowing, which can help to prove retaliation. Yet, going public may expose you to professional isolation, public scrutiny, expensive defamation suits, and even threats to your safety.
Someone you report to the IRS might find out, especially if the information leads to a significant investigation or award, but the IRS has strong confidentiality laws and will protect your identity to the fullest extent possible, particularly if you provide an award-eligible tip; for anonymous tips, they won't know it came from you, but you won't get a reward. Your identity is generally protected, but IRS investigations can reveal details, and if you claim an award (Form 211), your identity becomes known to the IRS.
Special Agents have no such pressure.
With a 90% conviction rate to protect, they dont bring cases they might lose. They take as long as necessary to make sure theyll win. That “luxury of time” is paid for with your anxiety. The typical IRS criminal investigation takes 12 to 24 months to complete.
An award worth between 15 and 30 percent of the total proceeds that IRS collects could be paid, if the IRS moves ahead based on the information provided. Under the law, these awards will be paid when the amount identified by the whistleblower (including taxes, penalties and interest) is more than $2 million.
Amount of Reward to the Informer – The Informer's reward shall be equivalent to ten percent (10%) of the taxes and penalties (or compromise amount, in case of compromise settlement ) actually collected as a result of the Confidential Information, or One Million Pesos (P1,000,000.00) per case, whichever is lower, ...
In fact, for a matter to be eligible for an IRS whistleblower award, the monetary sanction (penalties, tax and interest) must meet a $2 million threshold. In addition, when reporting violations committed by an individual, the bad actor must have earned a gross income over $200,000 in one of the tax years at issue.
Name, address and taxpayer identification number (if known) of the person or entity you're reporting. Description of the alleged noncompliance. This should include specific and credible allegations where the person or entity failed to comply with laws the IRS is authorized to administer, enforce or investigate.
Overall, the IRS has awarded over $1 billion to whistleblowers. Some of the types of frauds the IRS investigates include false exemptions, kickbacks, false tax documents, unreported income, organized crime, abusive tax schemes and even the underpayment of taxes.
If the government steps into (“intervenes in”) the case and takes over prosecution, the whistleblower (called the “relator”) may receive an award between 15 to 25 percent of what the government recovers.
The Internal Revenue Service's whistleblower office incentivizes people to report tax evasion and other tax law violations. The IRS Whistleblower Program rewards whistleblowers by paying 15 to 30% of government recoveries that result from the whistleblower's reporting to the IRS Whistleblower Program.
Not reporting all of your income is an easy-to-avoid red flag that can lead to an audit. Taking excessive business tax deductions and mixing business and personal expenses can lead to an audit. The IRS mostly audits tax returns of those earning more than $200,000 and corporations with more than $10 million in assets.
Section 7206 establishes, among other crimes, the federal tax crime of making false or fraudulent statements to the IRS, and aiding or assisting a taxpayer in making such statements. Common violations of section 7206 include falsely inflating deductions or underreporting income.
Stress, anxiety, and depression are common among whistleblowers. The pressure from retaliation, industry blacklisting, and social isolation contributes significantly to these issues.
The law provides that whistleblowers shall not incur criminal liability with respect to the acquisition of, or access to, the information that is reported or publicly disclosed. They cannot be sentenced for any offenses committed in order to gather proof or information as long as they obtained it in a lawful manner.
Proving a whistleblower claim requires establishing you engaged in a protected activity (reporting wrongdoing) and faced an adverse action (like firing or demotion), then linking the two, often using a timeline showing close proximity between your report and the employer's action, alongside strong evidence like financial records, emails, policy violations, and witness statements that show the employer's knowledge and retaliatory intent, eventually overcoming the employer's defense that they would have acted the same way anyway.