The IRS Whistleblower Program: False Revenue Reporting

The IRS Whistleblower Program, set up in 2006, rewards individuals for reporting major tax evasion like false revenue reporting, with potential awards ranging from 15% to 30% of collected proceeds, though stringent eligibility criteria apply.

Updated

May 14, 2025

Reporting False Revenue - IRS Whistleblower Program
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False revenue reporting has significant implications not only for investors, shareholders, and the broader market but also for governmental bodies responsible for tax collection. By manipulating revenues, businesses might also manipulate their taxable income, potentially defrauding the government of legitimate tax revenues.

To address this activity, the Internal Revenue Service (IRS) provides a significant reward for those who come forward with information about potential false revenue reporting. Continue reading to learn how tax whistleblowers can report false revenue reporting and the potential rewards they may receive.

IRS Whistleblower Program and False Revenues

The IRS Whistleblower Program, rooted in the Tax Relief and Health Care Act of 2006, was established to incentivize individuals with knowledge of significant tax evasion, such as false revenue reporting, to report it to the IRS.

Given the number of taxpayers and complex financial arrangements, the IRS often relies on tips from insiders to detect and resolve major tax non-compliance issues.

This program primarily targets high-value claims, with a focus on cases where the falsely reported revenues in dispute exceed $2 million. If the taxpayer in question is an individual, their gross income must exceed $200,000 for the relevant tax year.

Not everyone can qualify as a whistleblower – there are certain criteria that must be met in order to receive a reward, including the following:

  • The information regarding the false revenues must be significant and result in the collection of taxes, penalties, and other amounts.
  • The whistleblower must not be an “insider” or someone who’s obligated to report tax non-compliance as part of their job.
  • Individuals convicted of criminal conduct arising from their role in the reported tax evasion are not eligible.

If the IRS takes action based on a whistleblower’s information, the whistleblower may receive an award of between 15% to 30% of the collected proceeds.

The precise percentage varies based on several factors, including the extent to which the whistleblower and the information provided contributed to the IRS’s action.

In cases where the whistleblower’s information was not the primary source but still substantially contributed to the IRS’s action, the award could be reduced to a maximum of 10%.

The whistleblower must apply for the award using Form 211. The IRS then reviews the claim and the outcome of the reported case to determine the reward amount.

Preliminary Determinations

After the IRS Whistleblower Office reviews the whistleblower’s submission and the outcome of the reported false revenue tip, it will make a preliminary determination about the award. This determination is sent to the whistleblower and their legal representative if they have one.

Whistleblowers can agree with the preliminary determination by signing and returning it. If they disagree, they have the option to submit a response detailing their reasons and providing supporting evidence. This response will then be reviewed by the IRS Whistleblower Office.

Final Determinations and Award Orders

If a whistleblower disagrees with the preliminary determination and provides a response, the IRS Whistleblower Office will review the information provided and issue a final determination.

Once a final determination is made, the whistleblower has 30 days to appeal the decision to the United States Tax Court. If no appeal is made within that time frame, the decision becomes final, and no further administrative or judicial review is available.

Seeking an Attorney

Considering the potential complications of reporting false revenues, whistleblowers might benefit from legal counsel when navigating this program. Our firm is behind many of the world’s largest tax fraud cases, and have even helped draft the rules on IRS whistleblowing. If you’re in need of top legal counsel, look no further than Kohn, Kohn & Colapinto.

Our Firm’s Cases

  • Bradley Birkenfeld - IRS Fraud Whistleblower

    $104 Million Reward

    As an international banker at UBS in Switzerland, Bradley Birkenfeld exposed a massive tax evasion scheme, leading UBS to disclose over 4,450 U.S. tax evaders and pay a $780 million fine to the IRS. He was awarded $104 million by the IRS for his information.

  • Anonymous IRS Whistleblower

    $98 Million Award

    The tax whistleblower exposed major international illegal tax schemes for offshore banks. This whistleblower’s allegations led to 387 US payers getting caught red-handed, having stashed millions in illegal offshore accounts.

  • Alexander “Sasha” Chepurko

    $100 Million Exposed

    Alex Cherpuko, a 21-year-old whistleblower at the time, exposed a $100 million criminal enterprise, securing a $69.6 million judgment and becoming the first to simultaneously use False Claims Act, Dodd-Frank Act, and IRS whistleblower laws.

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