IRS Celebrates National Whistleblower Day: $1.2 Billion Awards, $7 Billion Paid By Non-Compliant Taxpayers

IR-2024-199, IRS Whistleblower Office Celebrates National Whistleblower Day; Over $7 Billion in Collected Proceeds Thanks to Whistleblowers (July 29, 2024):

In anticipation of National Whistleblower Appreciation Day on July 30, the Internal Revenue Service Whistleblower Office today recognized the important role whistleblowers play in supporting the nation’s tax administration.

Since issuing its first award in 2007 through June 2024, the IRS has paid over $1.2 billion in awards based on the successful collection of $7 billion from non-compliant taxpayers. ...

In Fiscal Year 2023, the IRS paid awards totaling $88.8 million based on whistleblower information attributable to tax and other amounts collected of $338 million. In Fiscal Year 2023, the Whistleblower Office established 16,932 award claims, an increase of 44% compared to the average of the prior four years. ...

Actionable claims contain specific, timely and credible information. A whistleblower may qualify for an award when use of the whistleblower’s information results in proceeds collected. The awards paid to whistleblowers generally range between 15 and 30% of the proceeds collected and attributable to their information.

IRS Whistleblower Office, FY 2023 Annual Report:

Scope of the Report
The Tax Relief and Health Care Act of 2006 (TRHCA 2006) requires the Internal Revenue Service (IRS) to conduct an annual study and report to Congress on the use of Internal Revenue Code (IRC) Section 7623 including an analysis of the use of IRC Section 7623, the results of the use, and any legislative or administrative recommendations regarding the provisions of IRC Section 7623 and its application. IRC Section 7623 provides for awards, in some cases mandatory, when the IRS takes action based on a whistleblower’s information. Claims for award that provide specific and credible information regarding tax underpayments or violations of laws which the IRS is authorized to enforce, investigate, or administer and that lead to proceeds collected may qualify for an award.

Message from the Director

THIS YEAR’S REPORT
The Fiscal Year (FY) 2023 Report covers the period October 1, 2022, through September 30, 2023. New in this year’s report, we’ve reported on the timeliness of authorized disclosures and the timeliness for issuing Preliminary Award Recommendation Letters (PARLs). We added a global breakout by continent for whistleblower claims filed for the fiscal year, and we added information regarding the IRS Whistleblower Program Improvement Plan. In addition, we’ve included more information on legislative and administrative recommendations for the IRS Whistleblower Program.

FY 2023 RESULTS
In FY 2023, the IRS paid whistleblowers 121 awards totaling $88.8 million attributable to information that resulted in proceeds collected of $338 million. The total dollar amount of awards paid increased from FY 2022 when $37.8 million in awards were paid. The total number of awards paid in FY 2023, however, decreased from 132 in FY 2022 to 121 in FY 2023. Although the number of awards decreased in FY 2023, the number of claims related to those awards was 1,234 in FY 2023 compared to 396 claims in FY 2022. Indeed, the 1,234 claims related to awards was the highest since the start of the current IRS Whistleblower Program in 2007. Awards paid as a percentage of proceeds collected increased from 14.7% in FY 2021 to 21.9% in FY 2022 and 26.3% in FY 2023.

In FY 2023, 21 Internal Revenue Code (IRC) Section 7623(b) awards were paid totaling $86.6 million attributable to proceeds collected of $326.3 million. That compares to 26 awards paid totaling $34.5 million attributable to proceeds collected of $152.7 million in FY 2022.

IRC Section 7623(a) award results decreased in FY 2023 to 100 awards paid totaling $2.2 million attributable to proceeds collected of $11.7 million. In FY 2022, 106 IRC Section 7623(a) awards totaling $3.3 million attributable to collected proceeds of $20.0 million were paid.

Average claim processing time (the time from the date a claim is received to the date an award is paid) for IRC Section 7623(b) award payments made during FY 2023 increased by 0.4% from the prior year and average claim processing time for IRC Section 7623(a) award payments increased by 5.9%. The time for paying a claim is heavily dependent on compliance actions taken with a taxpayer, the taxpayer’s exercise of rights to request assistance from the Independent Office of Appeals or to litigate disagreements with the IRS’s determination, the time it takes to collect any proceeds attributable to the whistleblower, andIn FY 2023, the Whistleblower Office received 6,455 submissions and built (established) 16,932 claim numbers. In FY 2022, we received 5,084 submissions and built 12,597 claim numbers. In FY 2023, the Whistleblower Office made 5,876 authorized disclosures to whistleblowers as required by the Taxpayer First Act (TFA). In FY 2022, we made 4,115 authorized disclosures. The TFA provided an exception to the non-disclosure rules in IRC Section 6103 to require notifications to whistleblowers when a claim is referred for examination, when a taxpayer makes payments related to a tax liability attributable to information provided by the whistleblower, and generally require the IRS to share information on the status and stage of a taxpayer case related to a whistleblower claim.

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