A person who provides information about unpaid federal tax to the IRS Whistleblower Office (WBO) may qualify for a cash award. The information must be specific, credible and lead to the collection of tax. One tipster claimed that over 200 fast-food restaurants connected to a franchisor were “skimming cash off sales and not reporting the income.” The WBO rejected the claim after the IRS investigated and found no evidence to corroborate the allegations. Later, the tipster resubmitted the same claims, based on a change of tax law, which the WBO said didn’t affect the outcome. Because no action was taken to collect proceeds, the U.S. Tax Court dismissed the case. (TC Memo 2023-45)
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