A tax whistleblower can earn millions and millions of dollars by possessing the right information and working with the right attorney to submit "specific and credible" information to the IRS under the IRS Tax Whistleblower Program.  However, the tax whistleblower must follow the proper steps in order (i) to increase the odds that the IRS will accept the information as part of the Tax Whistleblower Reward Program and (ii) to maximize the amount of the reward (30% rather than the minimum 15% reward).  Remember, the information means nothing if the IRS does not accept the case into the Tax Whistleblower Reward Program.

Is your identity really protected?

Most tax whistleblowers strongly desire that their identity remain confidential.  At Tax Whistleblower Law Firm, LLC, we take all possible steps to ensure that the identity of a tax whistleblower remains confidential.  The answers to frequently asked questions regarding confidentiality are as follows:

FAQ   Does the IRS have to know my name?

Yes!  I.R.C. § 7623, the law that created the Tax Whistleblower Reward Program, states, “Submission of information.--No award may be made under this subsection based on information submitted to the Secretary unless such information is submitted under penalty of perjury.”  Thus, the IRS must know the identity of the tax whistleblower, and the tax whistleblower must be willing to sign a statement regarding the truth of the information being provided.  However, when possible, it is the policy of the IRS to protect the identity of the tax whistleblower from disclosure.  Read below.

FAQ   Is it mandatory that a whistleblower’s identity be held confidential?

No.  I.R.C. § 7623 contains no specific provision for the protection of the whistleblower’s identity.  However, when possible, it is the policy of the IRS to protect the identity of the tax whistleblower from disclosure.  Read below. 

FAQ   What is the IRS policy with respect to confidentiality of the tax whistleblower?

The IRS, through Notice 2008-4, states:  The IRS will protect the identity of the claimant to the fullest extent permitted by law.  Under some circumstances, such as when the claimant is needed as a witness in a judicial proceeding, it may not be possible to pursue the investigation or examination without revealing the claimant’s identity.  The IRS will make every effort to inform the claimant before proceeding in such a case.  Thus, the IRS will protect the identity of the tax whistleblower from disclosure unless the IRS is compelled to disclose such identity by law or unless the IRS decides that it is necessary to call a tax whistleblower to testify as a witness in a court case.

FAQ   How important is confidentiality?

The answer is based upon the facts of a particular situation.  A tax whistleblower can be subject to retribution.  For example, it is possible that the tax whistleblower could be sued for his actions for numerous reasons including, but not limited to, breach of contract, breach of fiduciary duties, and perhaps for theft of the taxpayer’s property (e.g., contracts, bank statements, etc.).  In addition, some tax whistleblowers have a realistic fear that criminal activity could occur as retribution.  Therefore, to minimize the risk of retribution, we advise our clients that confidentiality is extremely important and that all steps should be taken to protect the identity of a tax whistleblower.  

FAQ   How can the taxpayer find out who the whistleblower might be?

The identity of a tax whistleblower can only be errantly disclosed to the taxpayer, or others, from three sources:  (1) The Whistleblower Attorney and his/her office, (2) the IRS personnel working the case, and (3) the whistleblower himself/herself.

(1) At S & P Law Firm, LLC, we take all possible steps to ensure that we do not make an errant disclosure. 

(2) The IRS has policies and procedures in place to ensure that they do not make an errant disclosure.

(3) The third potential source of errant disclosure is wholly within the control of the tax whistleblower.  It is difficult for some tax whistleblowers to maintain their own confidentiality.  Potentially millions may be paid to the tax whistleblower, and it is exciting to talk about and imagine what to do with the potential reward.  Nevertheless, we advise our clients never to talk to anyone, even family members, about a case in the Tax Whistleblower Reward Program.  It serves no legitimate purpose to share or brag about a case.  It is also conceivable that a potential reward could be considered an asset in a creditor collection situation or in a divorce situation and could become a public record in a court case, bankruptcy, or divorce proceeding.  Thus, in addition to fear of retribution, these other potential circumstances should encourage a tax whistleblower never to discuss a case under the Tax Whistleblower Reward Program with anyone other than the attorney with whom he/she is working on a case.

FAQ   Does a taxpayer care who the whistleblower might be?

Yes.  In our experience, a taxpayer who believes that he is the target of an IRS audit or investigation because of a tip will always seek the identity of the informant.  Not every taxpayer in this position presents a danger of retribution, but it is human nature for a taxpayer to desire to know who turned him in.

FAQ   If the IRS and my representative will not reveal my role as a whistleblower, how could it otherwise be revealed?

Your identity as a whistleblower should be kept confidential; however, whether the identity of a tax whistleblower can be kept confidential varies based upon the facts and circumstances of each particular case.  You should always discuss confidentiality with your attorney if confidentiality is important to your decision to become a whistleblower.  Your attorney should be able to evaluate what the chances are that your identity would need to be revealed by the IRS and what your risks would be should disclosure become necessary by the IRS.  For instance, although your attorney and the IRS will protect your confidentiality, you may be required, under particular circumstances, to disclose your participation in the Tax Whistleblower Reward Program if required by law or ordered by a Federal judge or magistrate.  There may be other circumstances, too, such as if you are asked in a deposition whether or not you disclosed information under the Tax Whistleblower Reward Program.