The IRS announced today (IR-2007-25 released but not yet posted on its news release website) the appointment of Stephen Whitlock, a former head of the IRS Office of Professional Responsibility, to head the new Whistleblower Office, which will receive tips about cheating taxpayers and handle rewards for whistleblowers.
Taxpayers can collect up to 30% of the tax due under the whistleblower rules, as described below.
The IRS Whistleblower Office, which was established by the Tax Relief and Health Care Act of 2006, will process tips received from individuals who spot tax problems in their workplace, while conducting day-to-day personal business or anywhere else they may be encountered.
A reward worth between 15 percent and 30 percent of the total proceeds that IRS collects could be awarded, if the IRS moves ahead based on the information provided.
Will the existence of the new office dissuade would-be cheaters? It may well encourage some people to report on cheating who might otherwise not have done so, like a home renovator who is offered a 10% discount by a contractor to pay untraceable cash or a farmers' market participant who hears a neighboring salesperson brag about never reporting cash income.
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