There are several qualifications needed to become an IRS whistleblower. There are also other requirements that IRS whistleblowers must meet in order to become eligible for financial rewards.
Like other qui tam whistleblower laws, 26 USC 7623 of the IRS tax whistleblower law offers payouts ranging from 15 to 30 percent of the amount recovered if the penalties, taxes, and interest collected exceed a certain threshold. In this case, they must exceed $2 million.
If the IRS whistleblower case deals with an individual, his or her annual gross income must be more than $200,000.
If the IRS whistleblower disagrees with the outcome of their case, they can begin an appeals process in Tax Court.
Claimants who do not meet the $2 million threshold or do not have cases involving individuals with annual gross incomes of $200,000 or more can still qualify for awards. The whistleblower rewards through this program are less, with a maximum award of 15% of the sanctions collected, up to $10 million. In these cases, the IRS whistleblower cannot appeal the decision in Tax Court.
Once an IRS whistleblower claim is filed, the Whistleblower Office will examine the case and decide if the claim is worth pursuing. The entire process, which includes the time from the submission of the whistleblower claim and the collection of the proceeds, can take several years. The payment of whistleblower awards cannot be made until the IRS has collected all of the taxes, penalties, and interest.