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Tax cheats are a universal uniter. We all want these scofflaws caught and made to pay their tax bills. Sometimes it takes a whistleblower to bring tax evasion to light. These informants, tax and otherwise, will be celebrated on National Whistleblower Day, July 30. Read on for more about the event and how, if you know of tax evasion, you can join the whistleblower ranks and possibly be rewarded.
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This July 4th we celebrated the 250th anniversary of the Declaration of Independence. As is often pointed out, English taxes were one of main reasons the colonists wanted to break away and form the new United States.
Another key, and almost as old, tax-related anniversary arrives on July 30. On that day in 1778 the Continental Congress passed first U.S. whistleblower law. It declared it the duty of every citizen to report misconduct.
On National Whistleblower Day each July 30 the efforts of individuals who exposed wrongdoing within private and public organizations, often at great personal and professional risk, are recognized.
And it is no surprise that the Internal Revenue Service is supporter of whistleblower efforts.
Public tips supplement strapped IRS: The IRS has long worked under financial strain, regularly facing budget limitations that hamper its ability to fully do its job.
During this second Donald J. Trump term, the agency has lost not only operational funds, but also personnel to track missing tax dollars.
That’s part of why the agency welcomes what is calls “the important role whistleblowers play in exposing fraud, reducing the tax gap, and strengthening compliance.”
The IRS’ own tax whistleblower program began in 2007. Since then, information gathered by the agency’s Whistleblower Office has contributed to “significant enforcement outcomes.” Specifically, that comes to more than $8 billion in due tax recovered and more than $1.4 billion paid in awards to those who provided the useful info.
Whistleblowers’ efforts “make our tax system stronger by exposing wrongdoing and deterring bad actors,” said IRS Whistleblower Office acting director Erick Martinez. “Their tips provide the IRS with information the agency would not otherwise know about, potentially increasing collections, and improving tax compliance.”
How to blow the tax whistle: Each National Whistleblower Day the IRS commends those individuals who have provided the IRS with information critical to exposing tax fraud and helping the agency collect legally owed money.
The IRS Whistleblower Office also uses the July anniversary to highlight how others can join the tax whistleblower ranks and, in some cases, be financially rewarded for their efforts.
Over the past year, the IRS has enhanced its digital tools to make it easier to submit a whistleblower claim, increased awareness of emerging schemes, and continued to strengthen collaboration with whistleblower program stakeholders. These efforts include —
- Digital Form 211: The IRS launched Form 211, Application for Award for Original Information, allowing whistleblowers to submit information using a phone or laptop. As a result, submission rates have reached unprecedented levels.
- Streamlined online reporting: The IRS launched a centralized online reporting tool at IRS.gov/submitatip that provides step-by-step guidance to report fraud and scams, including information on how to submit documents.
- Whistleblower Alerts: The IRS Whistleblower Office continues to expand its Whistleblower Alert initiative, which highlights emerging abusive tax schemes and provides information to help individuals identify and report suspicious activity.
- Enhancing global tax compliance: The IRS Whistleblower Office collaborates with whistleblowers, practitioners, advocacy groups, and other governmental and international whistleblower programs, including assisting the United Kingdom tax authority’s whistleblower program.
The IRS notes that the most valuable whistleblower submissions contain specific, timely, significant, and credible information.
Where whistleblower information leads to the collection of taxes, penalties, or other amounts, the individuals providing the evidence could receive a monetary award.
Tax reward opportunities: Many whistleblowers obviously provide information about tax improprieties because they want to help make the U.S. tax system fairer.
But there’s no shame in wanting some financial compensation for such efforts either.
The IRS whistleblower reward law is codified at Title 26 U.S.C. §7623. It states that individuals who provide original information to the IRS about a violation of the tax laws or the underpayment of taxes are eligible to receive a monetary reward if their information results in a sanction against the tax law violator.
This includes non-U.S. citizens reporting offshore tax evasion, hidden foreign accounts, or other violations with U.S. tax implications.
No actual tax fraud needs to be proven to qualify for a reward. And under the “related action” provisions of the law, rewards may also be paid based on criminal penalties, civil forfeitures and/or violations of IRS reporting requirements.
Tax rewards not guaranteed: That said, it’s also important to know that providing information about tax evasion doesn’t necessarily guarantee you’ll be financially rewarded.
As noted earlier, the whistleblower data must lead to tangible IRS collection results. And, as one recent U.S. Tax Court case showed, it must be the main source for such collections.
The U.S. Tax Court in Dee v. Commissioner, 167 T.C. No. 1 upheld on July 2 the IRS Whistleblower Office’s denial of an award. The Court found no abuse of the Office’s discretion because the taxpayer’s submission, based on publicly available U.S. Securities and Exchange Commission filings, did not cause the IRS to initiate a new tax examination, expand the scope of the existing audit, or continue pursuing issues it otherwise would have abandoned.
“Upon receiving petitioner’s claim information, the [IRS] examination team surveyed it and informed the [Whistleblower Office] that the examination team had (before receiving the information) already acted on the issues that petitioner identified and finished their work,” according to the Tax Court ruling. So, based on that, the IRS Whistleblower Office was correct in denying the award claim.
Still, the Dees ruling notwithstanding, when the IRS receives new, credible, and actionable tax wrongdoing information, the provider of the information can be nicely compensated.
In 2014, the former UBS banker credited with helping break open Uncle Sam’s investigation into secret untaxed Swiss accounts was awarded $104 million.
Global whistleblower support: The IRS is not alone in relying on whistleblowers to find and recover unpaid taxes.
Approximately 1,200 HM Revenue & Customs (HMRC, the United Kingdom version of the IRS) tax investigations a year could qualify for the new enhanced whistleblowers rewards program that took effect last November. That number is based on the investigations that would have qualified last year per an analysis by the multinational law firm Pinsent Masons, reports IFA Magazine.
Under the new program, dubbed the Strengthened Reward Scheme, whistleblowers who help HMRC recover at least £1.5 million ($2 million) in unpaid tax can be rewarded with between 15 percent and 30 percent of the tax collected. Tax investigations that yield such large amounts of money usually target large companies, wealthy individuals or avoidance schemes.
And like here in the United States, the courts sometimes get involved in international whistleblower cases.
Switzerland’s highest court has ordered a new ruling in the case of three men accused of breaching bank secrecy laws over leaked data that helped expose the cum-ex tax fraud scandal, one of Europe’s largest financial crimes, reports Reuters.
The three men, who are not named in the court document, were convicted in 2019 of charges including banking espionage and violating banking secrecy, a verdict that was overturned on appeal in 2021.
The Zurich High Court eventually dropped the case, citing lengthy delays and finding the investigating prosecutor had been biased. But following an appeal by the Zurich Public Prosecutor’s Office, the Federal Supreme Court has now sent the case back to the High Court, ruling that neither the delays nor the alleged bias justified halting proceedings.
“The case is remanded to the lower court for a new decision,” the Federal Supreme Court said.
Whistleblower Day 2026 speakers: Back here in the United States, the National Whistleblower Center’s annual Whistleblower Day on Thursday, July 30, will once again focus on the country’s successes via informants.
The event, held in the Kennedy Caucus Room of the Russell Senate Office Building, will highlight how efforts in government, media, and across corporate America reinforces the necessity of whistleblower programs and enforcement.
Federal government speakers this year include —
- Erick Martinez, Acting IRS Whistleblower Office Director, will detail his agency’s commitment to its whistleblower program.
- Sen. Ron Wyden (D-Oregon), who is ranking member of the Senate Finance Committee and a founding co‑chair of the Senate Whistleblower Caucus. He has likewise championed stronger protections and stricter oversight across sectors from tax enforcement to intelligence.
- Sen. James Lankford (R-Oklahoma) is also a member of the Senate Whistleblower Caucus and the Senate Finance Committee, as well as the Chair of the Senate’s Select Committee on Ethics. His focus on fiscal responsibility in government includes support of whistleblowers.
- Director Raagnee Beri of the Commodity Futures Trading Commission (CFTC), who will make her first National Whistleblower Day appearance. Beri serves as Director of the CFTC’s Whistleblower Office, which administers the Commission’s program for individuals who report possible violations of the Commodity Exchange Act.
If you can’t make the event (it is waitlisted), the National Whistleblower Center will provide a follow-up reports. You also can find at its website more on other whistleblower protection efforts.
You also might find these items of interest:
- IRS launches new consolidated tax fraud web page
- Revolutionary sailors’ report of misconduct led to first U.S. whistleblower law
- ID theft protection tips in wake of whistleblower’s report on DOGE Social Security data collection
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