If you report tax noncompliance to the IRS and the government collects money because of your information, IRC §7623 can pay you a percentage of what the IRS recovers. Since 2007 the IRS Whistleblower Office has paid over $1.4 billion in awards based on more than $7.86 billion collected from noncompliant taxpayers. The program has two tracks with very different rules, and as of December 19, 2025 the IRS accepts Form 211 digitally for the first time.
If the amount in dispute exceeds $2,000,000, IRC §7623(b) entitles a whistleblower to a mandatory award of 15 to 30 percent of the proceeds the IRS collects, with Tax Court appeal rights; smaller cases fall under the discretionary §7623(a) program capped in practice at 15 percent with no appeal.
Congress split the program in the Tax Relief and Health Care Act of 2006, which created the mandatory track and established the Whistleblower Office. Which track applies is determined by statutory thresholds, not by the IRS's preference.
| §7623(b) - Mandatory | §7623(a) - Discretionary | |
|---|---|---|
| Award range | 15% to 30% of collected proceeds | Discretionary; capped in practice at 15% |
| Dollar threshold | Proceeds in dispute exceed $2,000,000 | No minimum |
| Individual taxpayer test | Target's gross income must exceed $200,000 for at least one year at issue | No income test |
| Appeal rights | Tax Court review under §7623(b)(4) | None |
| Authority | IRC §7623(b)(1), (b)(5) | IRC §7623(a) |
The Bipartisan Budget Act of 2018 added IRC §7623(c), which defines proceeds broadly: tax, penalties, interest, additions to tax, and additional amounts, plus amounts collected under laws the IRS is authorized to administer, enforce, or investigate, including criminal fines, civil forfeitures, and penalties for violations of reporting requirements. For practitioners in the international space, that last category matters: FBAR penalties count toward both the award base and the $2,000,000 threshold.
Two statutory haircuts apply on the mandatory track. If the action is based principally on specific allegations from public sources such as judicial or administrative hearings, government reports, audits, investigations, or the news media, the award is capped at 10 percent under §7623(b)(2). If the whistleblower planned and initiated the noncompliance, the Whistleblower Office may reduce the award, and must deny it entirely if the whistleblower is convicted of criminal conduct arising from that role, under §7623(b)(3).
An award claim requires Form 211, Application for Award for Original Information, signed under penalty of perjury. Anonymous submissions do not qualify for awards; the IRS needs a signed form and contact information to evaluate and pay a claim. As of December 19, 2025, the Whistleblower Office accepts a digital Form 211 and encourages its use (IR-2025-123). Paper filing remains available by mail to: Internal Revenue Service, Whistleblower Office - ICE, 1973 N. Rulon White Blvd., M/S 4110, Ogden, UT 84404. Do not submit the same claim through multiple channels; duplicates delay processing. After submission, the office assigns a claim number, sends a written acknowledgment, and runs a taint review to screen for privileged or legally problematic material before any examination team sees the information.
Whistleblower awards are ordinary income in the year received, and the IRS reports them at gross on Form 1099, including any portion paid to counsel. For §7623(b) awards, IRC §62(a)(21) allows an above-the-line deduction for attorney fees and court costs, limited to the award amount included in income that year. For §7623(a) awards, no above-the-line deduction exists under current law, and with miscellaneous itemized deductions unavailable, attorney fees on discretionary awards are generally nondeductible. A pending legislative proposal (Taxpayer Assistance and Service Act §706) would extend §62(a)(21) to §7623(a) awards, but it is not law as of June 10, 2026.
The Taxpayer First Act of 2019 added IRC §7623(d), which prohibits employers from retaliating against employees for reporting tax underpayment or tax law violations and gives affected employees a federal enforcement path with remedies including reinstatement and back pay. Reporting internally to a supervisor is protected alongside reporting to the IRS.
Whistleblower cases run long. Awards are paid only from collected proceeds, which means the examination, any appeal or litigation by the taxpayer, and collection must all finish first; multi-year timelines are normal. In fiscal year 2024 the IRS paid $123.5 million in awards attributable to $474.7 million collected. The Whistleblower Office protects claimant identity to the extent §6103 and the circumstances permit, but confidentiality is not absolute; in rare cases a whistleblower may be needed as a witness.