To be a successful IRS Tax Whistleblower, an individual needs to have “specific and credible” information that leads the IRS to the detection and collection of the underpayment of a tax. Simply “believing” or “thinking” that there has been an underpayment of tax is not enough; a tax whistleblower must have actionable information and supporting documentation verifying the information. The 2018 Annual Report recently published by the IRS Whistleblower Office reflected that 8,262 whistleblower claims (64% of all cases closed) were closed because they were not Specific, Credible or are Speculative in nature.
The Ideal IRS Tax Whistleblower:
Is a true insider of the taxpayer. This is often an attorney, accountant (CPA), CFO, CEO, Tax Director or any other individual with inside information and knowledge of the tax practices of the taxpayer.
Typically has a close relationship with the taxpayer. This can include a close confidant or even a relative.
Is reporting a taxpayer that owes over $ 2,000,000 of tax (including penalties and interest) and has the financial means to pay the liability.
Maintains a relationship with the taxpayer and is aware of the IRS audit once it begins.
Can address possible defenses of the taxpayer, and how to defeat them.
What Makes a Great Claim?
Detailed inside information about the underpayment of tax, including documentation.
A simple fact pattern, preferably on one or two issues involving large dollars.
Time remaining on the normal statute of limitations (i.e. three years) for the taxpayer’s returns.
An ongoing issue (i.e., Taxpayer continues to fail to pay their tax liabilities in present as well as future years).
How to Support Your Claim:
A credible claim has supporting documentation verifying the factual allegations made. In some cases, a potential whistleblower may be unaware of the documents in their possession. Court precedent allows the government (i.e., IRS) to receive (stolen) documents in a passive capacity.
In addition, it is always helpful if the whistleblower can identify other witnesses that can corroborate the allegation of facts.
How to File a Claim:
The IRS website (irs.gov) has information regarding filing a whistleblower claim using Form 211; however, due to the complexity of the underlying tax issues, the developing whistleblower law, the potential involvement of the whistleblower in the taxpayer’s underpayment of tax, the interview (debriefing by the IRS) and the intricacies of the lengthy process, it is recommended that appropriate legal counsel is obtained.
For more information, check out our full website at www.twlfusa.com