New (Disclosure) Regulations Improves IRS Tax Whistleblower Program

ST. LOUIS, MO, March 16, 2011 (Press-News.org) Tres. Reg. Section 301.6013(n)-2 are final and will be effective March 15, 2011. These regulations are much needed in this multi-billion dollar Tax Whistleblower Program in allowing the IRS to disclose taxpayer information to a Whistleblower and his representative. Pursuant to these regulations -

1. The IRS may disclose taxpayer information to the Whistleblower, or his representative, pursuant to a written contract with the whistleblower for purposes of engaging the services of the whistleblower in the detection of violations of the internal revenue laws or related statutes.

2. Whether or not to enter into a contract with the whistleblower is at the complete discretion of the IRS

There are limitations by the IRS to disclosing taxpayer information under these regulations and taxpayer information shall only be disclosed under the following circumstances:

1. The IRS deems it necessary.
2. The IRS determines that the services of a whistleblower can be performed reasonably and properly by disclosure of only parts or portions of return information, and then only the parts or portions of the return information shall be disclosed.
3. To the extent that a contract has been entered with the Whistleblower under these regulations, the whistleblower may inquire as to the status of any award he is entitled only if the IRS determines that the disclosure of such information would not seriously impair Federal tax Administration.
4. The Whistleblowers may not further disclose the information received from the IRS.
5. The Whistleblower is subject to civil and criminal penalty for improper disclosure of such information received.

These much needed regulations reflect that the IRS is recognizing the value of a Whistleblower in these matters. The Whistleblower is often the CFO, attorney, CEO office manager, etc. that knows the facts inside and out. The Whistleblower normally knows where the records are kept or whether the records exist, such as someone's email. The Whistleblower can provide comments and can counter the taxpayer's arguments with respect to facts that were alleged by the taxpayer. However, sometimes the whistleblower is the Subject Matter Expert (SME) with respect to a legal issue and is more knowledgeable than the IRS who may be unfamiliar with a complicated tax issue for which it has had little to know experience in the past, but for which the Whistleblower has brought to the IRS attention.

The IRS should be congratulated by this new step of moving the program forward. Now that they have the tool, let's hope they use it.

Former IRS attorneys at the Tax Whistleblower Law Firm working full time on tax whistleblower cases. With over three years of experience and 100% of acceptance rate of cases into the program, we use our experience to prepare a proper case for the IRS in order to get the case accepted and to maximize the reward. We will guarantee our client's confidentiality and appeal the case, if necessary, to the U.S. Tax Court.
For further information, please contact us at 877-404-1040 or contact one our attorneys directly at 314-795-7800.