PPP KINGDOM

PPP KINGDOM

IRS WHISTLEBLOWER COMPENSATION

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http://www.bankingprnews.com/banking_and_financial_articles/2011/04/first-irs-whistleblower-reward-under-new-program-paid-to-a-cpa-for-providing-irs-with-valuable-information-leading-to-collection-of-unpaid-taxes-207200.htm

http://www.irs.gov/compliance/article/0,,id=180171,00.html

CPAs and accountants nationwide have taken notice of the recent announcement that the IRS paid an accountant a $4.5 million award – the first under the new provisions of the Whistleblower Program – for finding an estimated $20 million of tax underpayment by his employer.

What are the rules for getting an award?

The law provides for two types of awards. If the taxes, penalties, interest and other amounts in dispute exceed $2 million, and a few other qualifications are met, the IRS will pay 15 percent to 30 percent of the amount collected. If the case deals with an individual, his or her annual gross income must be more than $200,000. If the whistleblower disagrees with the outcome of the claim, he or she can appeal to the Tax Court. These rules are found at Internal Revenue Code IRC Section 7623(b) – Whistleblower Rules.

The IRS also has an award program for other whistleblowers – generally those who do not meet the dollar thresholds of $2 million in dispute or cases involving individual taxpayers with gross income of less that $200,000. The awards through this program are less, with a maximum award of 15 percent up to $10 million. In addition, the awards are discretionary and the informant cannot dispute the outcome of the claim in Tax Court. The rules for these cases are found at Internal Revenue Code IRC Section 7623(a) – Informant Claims Program, and some of the rules are different from those that apply to cases involving more than $2 million.

Best Regards,

FINANCIAL WARRIOR

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