What is IRS Form 211?

Whistleblowers do not need to be in the United States to report. Any whistleblower is able to utilize IRS Form 211 to claim a reward, with the exception of certain individuals. Those who are ineligible include current or former employees of the federal government who gained their information during the course of their official duties. Furthermore, individuals who were employed by the U.S. Department of the Treasury at the time when they received or provided information about tax evasion are also not eligible for this reward.

If a whistleblower is seeking a reward, they must have a claim that is specific, credible, and supported information. Reports may not be made out of suspicion or as a “guess.” The program looks for a “significant federal tax issue,” rather than a small tax mistake, so it is not intended to be used to settle personal disputes.

The following positive factors may support increasing an award: 

• The whistleblower acted promptly to inform the IRS or the taxpayer of the tax noncompliance.
• The information provided identified an issue or transaction of a type previously unknown to the IRS.
• The information provided identified taxpayer behavior that the IRS was unlikely to identify or that was particularly difficult to detect through the IRS’s exercise of reasonable diligence.
• The information provided thoroughly presented the factual details of tax noncompliance in a clear and organized manner, particularly if the manner of the presentation saved the IRS work and resources.
• The whistleblower (or the whistleblower’s legal representative, if any) provided exceptional cooperation and assistance during the pendency of the action(s).
• The information provided identified assets of the taxpayer that could be used to pay liabilities, particularly if the assets were not otherwise known to the IRS.
• The information provided identified connections between transactions, or parties to transactions, that enabled the IRS to understand tax implications that might not otherwise have been understood by the IRS.
• The information provided had an impact on the behavior of the taxpayer, for example by causing the taxpayer to promptly correct a previously-reported improper position.

The following negative factors may support decreasing an award:

• The whistleblower delayed informing the IRS after learning the relevant facts, particularly if the delay adversely affected the IRS’s ability to pursue an action or issue.
• The whistleblower contributed to the underpayment of tax or tax noncompliance identified.
• The whistleblower directly or indirectly profited from the underpayment of tax or tax noncompliance identified, but did not plan and initiate the actions that led to the underpayment of tax or actions described in IRC § 7623(a)(2).
• The whistleblower (or the whistleblower’s legal representative, if any) negatively affected the IRS’s ability to pursue the action(s), for example by disclosing the existence or scope of an enforcement activity.
• The whistleblower (or the whistleblower’s legal representative, if any) violated instructions provided by the IRS, particularly if the violation caused the IRS to expend additional resources.
• The whistleblower (or the whistleblower’s legal representative, if any) violated the terms of the confidentiality agreement described in 26 CFR 301.7623-3(c)(2)(iv).
• The whistleblower (or the whistleblower’s legal representative, if any) violated the terms of a contract entered into with the IRS pursuant to 26 CFR 301.6103(n)-2.
• The whistleblower provided false or misleading information or otherwise violated the requirements of IRC § 7623(b)(6)(C) or 26 CFR 301.7623-1(c)(3).

The process of gathering evidence and collecting tax funds is a long and arduous process, and whistleblower rewards are not paid until the IRS determines the final amount collected from a report.

For 7623(b) claims, i.e. Whistleblower Program 1, this takes on average 11.24 years, and for 7623(a) claims, i.e. Whistleblower Program 2, this takes on average 9.79 years, according to the IRS Whistleblower Office’s 2022 Report.