You’ve probably read about IRS whistleblowers cashing in for reporting suspected tax fraud. It may seem to be anew development, but IRS whistleblowing incentives started in 1867! Still, big changes in 2006 raised the stakes materially, adding new Section 7623(b).
Under it, awards to whistleblowers are no longer discretionary. Now, the whistleblower “shall” receive 15 to 30 percent of the collected proceeds. That’s shall, not may. But getting the money has proven nearly impossible.
There are many whistleblowers but few are getting money out of the process. See Patient Tax Tattletales Can Earn Big. The IRS created a Whistleblower Office reporting to the IRS Commissioner to implement the law. See Whistleblower/Informant Award. But progress is slow.
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