Taxpayers who give the IRS Whistleblower Office information about unpaid taxes may qualify for cash awards. To be eligible, tips must be credible and specific, relate to tax underpayments or violations of tax laws and be used to collect proceeds. In one case, a whistleblower provided a tip to the IRS regarding a company he thought was improperly claiming deductions and running a transfer-pricing scheme. After a revenue agent’s (RA’s) review, the IRS made adjustments and recovered money based only on the RA’s information gathering. A federal appeals court ruled the IRS didn’t have to reward the individual because his submission didn’t result in tax proceeds. (Villa-Arce, CA DC, 5/26/23)
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