The New IRS Whistleblower Program

Recently, our friends at the IRS instituted a far more generous program whereby those who blow the whistle on tax fraud can share in any proceeds the government collects. The old program it had utilized for years continues in operation, but the new program is far more generous and there are other advantages as well. So, as great as the new program is, how does one participate, and participate in a way that maximizes their chances for a substantial reward? One helpful guide is Joel D. Hesch’s, Reward: Collecting Millions for Reporting Tax Evasion, Your Complete Guide to the IRS Whistleblower Reward Program. The goal of this inexpensive paperback, which it admirably fulfills, is to educate the general reader quickly and concisely as to how to file a report and how to do so in a fashion that avoids making costly mistakes.

The author, now a law professor in Virginia, spent more than 15 years in the Civil Fraud Section of the Civil Division, where we worked together for a number of years. As such, he has substantial experience working with the whistleblower provisions of the False Claims Act. The FCA appears to have been the model for the new IRS program, and the author’s DOJ background is put to work in explaining the IRS program. According to a recent “New York Times” story, Phillips and Cohen apparently has gotten into this area as well. So FCA specialists might well consider adding this new dimension to their practices, since their qui tam backgrounds will ease mastering the IRS program.

Joel’s book teaches the reader the necessary program background, how the program operates, explains various tax fraud techniques, and lays out the range of possible rewards (usually 15%-30% of any IRS recovery) and what factors determine where on the continuum a reward is likely to be designated. The author not only discusses all the procedural steps a program participant must follow, but includes in a helpful series of appendices the actual forms that must be filed, relevant IRS guidellines, and other pertinent material which is placed right at the reader’s fingertips. Most importantly, since the IRS is very fussy about how reports are made, the author explains in detail how to avoid making mistakes that could send your claim to the twilight zone. To make sure costly mistakes are avoided, the book includes an 11-page, step-by-step checklist to be followed in filing a report. All of this information is included in 148 pages of text and another 30 of appendices. Virtually every page is useful–there is no fat! The book in a couple of hours certainly educated me as to the IRS program with which I was not familiar–I bet it can do the same for anyone interested in learning about it.

Familiarity with this new program seems like a must for those representing relators, for it could afford them additional methods for capitalizing on their insider knowledge of fraud.

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