Senate Finance Committee Invites Robert L. Vogel to Roundtable on Tax Whistleblower Law

Feb. 5, 2007 -- Along with several other nationally known experts on whistleblower laws, Robert L. Vogel was invited to participate today in a roundtable discussion held by the Senate Finance Committee on implementation of the new tax fraud whistleblower law. The Senate Finance Committee also invited experts on tax fraud, and officials from the Treasury Department, the Justice Department, and the Internal Revenue Service (IRS).

Codified at 26 U.S.C. § 2623, the new IRS whistleblower provisions provide significant rewards for those who report underpayments of taxes, provided that if the taxpayer is an individual, his or her gross income exceeds $200,000 for any taxable year and the tax penalties and interest in dispute exceed $2 million. Under the new law, someone reporting original information concerning an underpayment of taxes may receive up to thirty percent (30%) of any back taxes, and penalties and interest thereon, collected by the IRS as a reward for coming forward. If the whistle blower is eligible for such a reward, the IRS must pay a reward in the range of 15 to 30% of the recovery, depending on the value of the informant’s information, with the IRS’s exercise of discretion on the amount of the reward reviewable by the Tax Court. If the whistle blower is not an original source of the information on the underpayment, but nonetheless provides facts that lead to a collection, he or she may still collect up to 10% of the IRS recovery as a reward.

Congress has directed the IRS to establish a new Whistleblower Office to receive information from members of the public under this law. The IRS will publish rules implementing the new law in the near future. The purpose of the roundtable discussion in which Mr. Vogel participated was to assist the IRS in this effort.