It frequently takes 5 to 7 years, or more, to complete the process. Taxpayers may exercise the right to administrative and judicial appeals, which can take many years to resolve. The IRS can only pay awards from proceeds collected because of the information provided by the whistleblowers.
According to the SEC's FY 2020 Division of Enforcement Report, the median time for the SEC to open an investigation and file was 21.6 months (and the average was 24.1 months, second-fastest in the last five years, behind only 2019).
That process can also take a year or more to reach a settlement or trial. In our experience, the average whistleblower case takes about three or four years to resolve. Of course, some cases are resolved much faster, and some take a little longer.
If the taxpayer is an individual, they must have at least $200,000 in gross income. The Whistleblower Office will be responsible for assessing and analyzing incoming tips. After determining their degree of credibility, the case will be assigned to the appropriate IRS office for further investigation.
In general, the IRS will pay an award of at least 15 percent, but not more than 30 percent of the proceeds collected attributable to the information submitted by the whistleblower.
The IRS Whistleblower Reward
The IRS Whistleblower Program guarantees to the whistleblower at least 15%, and up to 30%, of government tax collections that result from the whistleblower's reporting to the IRS, to the extent those recoveries exceed $2 million.
All awards will be subject to current federal tax reporting and withholding requirements. Whistleblower will receive a Form 1099 or other form as may be prescribed by law, regulation, or publication.
Report Suspected Tax Law Violations
We will keep your identity confidential when you file a tax fraud report. You won't receive a status or progress update due to tax return confidentiality under IRC 6103. Tax fraud includes: False exemptions or deductions.
Whistle-blowers can get 15% to 30% of the amount collected if the case involves more than $2 million in taxes, penalties, interest and other amounts. (If the suspected cheater is an individual, he or she must also make more than $200,000 a year.) Below those thresholds, the award is discretionary.
There's no tax penalty for filing as head of household while you're married. But you could be subject to a failure-to-pay penalty of any amount that results from using the other filing status. This is 0.5% (one-half of one percent) for each month you didn't pay, up to a maximum of 25%.
If a whistleblower believes that they have been unfairly treated because they have blown the whistle they may decide to take their case to an employment tribunal. The process for this would involve attempted resolution through the Advisory, Conciliation and Arbitration Service (Acas) early conciliation service.
The Commission is authorized by Congress to provide monetary awards to eligible individuals who come forward with high-quality original information that leads to a Commission enforcement action in which over $1,000,000 in sanctions is ordered. The range for awards is between 10% and 30% of the money collected.
Whistleblower investigations vary in length of time. The parties may settle the retaliation complaint at any point in the investigation either through OSHA's Alternative Dispute Resolution (ADR) program, with the assistance of the assigned investigator, or through their own negotiated settlement that OSHA approves.
A whistleblower need not have witnessed the challenged fraud or misconduct but he or she must have concrete and specific evidence of the fraud. Mere suspicion or belief is not enough. Being able to identify the “who, what, where, when, why and how” of the challenged fraud or misconduct is most helpful.
Generally, the IRS can include returns filed within the last three years in an audit. If we identify a substantial error, we may add additional years. We usually don't go back more than the last six years.
Yes. It is surprisingly easy to do so. The IRS even has a form for turning in suspected tax cheats: Form 3949-A, Information Referral.
III.
Often a tax fraud investigation takes twelve to twenty-four months to complete, with 1,000 to 2,000 staff hours being devoted to the case.
In general, no, you cannot go to jail for owing the IRS. Back taxes are a surprisingly common occurrence. In fact, according to 2018 data, 14 million Americans were behind on their taxes, with a combined value of $131 billion!
IRS computers have become more sophisticated than simply matching and filtering taxpayer information. It is believed that the IRS can track such information as medical records, credit card transactions, and other electronic information and that it is using this added data to find tax cheats.
No. Under the laws of most states, it is illegal for an employer to retaliate against a whistleblower who has reported, or attempted to report, the illegal conduct of the employer.
The Office of Special Counsel (OSC) is an independent federal agency charged with investigating and prosecuting violations of the Whistleblower Protection Act.
The Department of Justice (DOJ) has the exclusive statutory jurisdiction to investigate allegations of whistleblower retaliation involving: Employees of the Federal Bureau of Investigation. Employees of DOJ contractors, subcontractors, grantees, and subgrantees.