Do You Get Money for Reporting Someone to the IRS?

Yes, you can get paid for reporting someone to the IRS for tax cheating. The IRS Whistleblower Office pays awards ranging from 15% to 30% of the money it collects because of your tip, though smaller cases fall under a discretionary program with no guaranteed minimum.¹ You only get paid if the IRS actually collects, and the wait is long: the average time from filing to payment now exceeds nine years.

How Much You Can Get Paid

The size of your reward depends on which of two tiers your case falls into.

Cases Over $2 Million

If the total tax, penalties, and interest in dispute exceed $2 million — and, when you are reporting an individual rather than a business, that person had gross income above $200,000 in at least one of the tax years involved — the IRS must pay you an award between 15% and 30% of what it collects.² “Collected proceeds” is broad: unpaid tax, penalties, interest, criminal fines, and civil forfeitures all count, along with recoveries under some non-tax laws the IRS enforces, such as foreign bank account reporting.³ These claims also come with the right to appeal the award amount in U.S. Tax Court.

Cases Under $2 Million

Smaller cases, or cases against individuals earning less than $200,000, fall under a discretionary program. The IRS decides whether to pay anything at all and how much to offer, with no statutory minimum percentage.⁴ Awards in this tier tend to be smaller.

What Moves the Percentage Up or Down

Within the 15%–30% band, several things push your percentage higher: reporting promptly, giving the IRS information about a transaction type it did not already know about, and uncovering behavior the agency was unlikely to detect on its own.⁵ Things that push it lower: delaying your report, being personally involved in the noncompliance, or compromising the confidentiality of the investigation.

Two situations cap or eliminate the award. If your tip is based mainly on information that was already public — court filings, government reports, news coverage — the maximum drops to 10% of collected proceeds.⁶ If you planned or initiated the tax scheme yourself, the IRS can reduce the award to any amount it chooses, including zero. If you are convicted of a crime tied to the scheme, the IRS must deny the award entirely.

Who Cannot Collect an Award

Some people are barred from receiving a whistleblower award no matter how valuable their information is:

Current or former Treasury Department employees, or anyone who was a Treasury employee when they obtained the information.
Federal employees who learned the information through their official duties.
Federal contractors who got the information through the contract.
Anyone required by federal law to disclose the information, or barred by federal law from disclosing it.
Anyone filing a claim based on information from someone who would be barred, if the point is to work around the bar.⁷

How to File the Claim

To be considered for an award, you file Form 211, Application for Award for Original Information. You must sign it under penalty of perjury.⁷ The form asks for specifics, and vague or incomplete submissions get rejected without investigation. Include:

The name, address, and taxpayer identification number (Social Security number or EIN) of the person or business you are reporting, if you know them.
A description of the alleged violations, the tax years involved, and how the taxpayer underreported income or claimed improper deductions.
How and when you learned about the violations.
Supporting evidence — financial records, emails, internal documents.

Your information has to be original. It cannot come from public sources like news articles or court transcripts. If any of what you know might be covered by attorney-client, tax-practitioner-client, or similar privilege, address that in your submission and explain any waiver you are relying on.

You can submit Form 211 electronically through the IRS digital form, which the Whistleblower Office recommends for faster and more secure processing.⁸ If you prefer paper, mail the completed form to:

Internal Revenue Service
Whistleblower Office – ICE
1973 N. Rulon White Blvd.
M/S 4110
Ogden, UT 84404

After the office receives your claim, you get an acknowledgment letter with a claim number.

Filing Jointly With Someone Else

If more than one person is providing the same evidence, you can file jointly. Each person signs a separate declaration under penalty of perjury on the Form 211. The IRS splits any award equally by default. If you want a different split, all of you have to submit a written, notarized agreement laying out the allocation with the claim.³

What Happens After You File

The Whistleblower Office reviews your submission for credibility and, if it looks worth pursuing, refers it to the appropriate IRS division. The IRS may then audit the taxpayer, assess penalties, or take legal action.¹ You will not get running updates. The IRS is allowed to tell you when your information has been referred for audit and when a related tax payment has been made, but that is the extent of it.⁹

An award is not paid until the reported taxpayer has exhausted every legal challenge and the IRS has actually collected the money. Appeals, litigation, and collection all have to run their course first. In the Whistleblower Office’s fiscal year 2024 annual report, the average time from claim submission to payment exceeded nine years for both tiers. Filing a claim is a long-term commitment.

Reporting Without Seeking a Reward

If you want to report suspected tax cheating but do not want to pursue an award, submit Form 3949-A, Information Referral. It lets you report violations, and your identity can be kept confidential to the IRS.¹⁰ Form 3949-A does not make you eligible for any payment. For that, you have to file Form 211.

Taxes on the Award

Whistleblower awards are taxable income in the year you receive them.¹¹ For U.S. citizens and resident aliens receiving awards above $10,000, the IRS withholds 24% for federal income tax at the time of payment. Payments to foreign persons are withheld at 30%, subject to any applicable tax treaty reduction.

If you hired an attorney for a high-value claim under Section 7623(b), you can deduct attorney fees and court costs as an above-the-line deduction, up to the amount of the award included in your income.¹² That deduction is not available for smaller Section 7623(a) claims.

Confidentiality and Protection From Retaliation

Tax return information is confidential by law, and the IRS generally will not disclose your identity or the details of the investigation to the person you reported. Confidentiality is not absolute, though. If the case moves into a legal proceeding, your identity could become relevant.⁹

If you are reporting your employer, federal law bars retaliation. Your employer cannot fire, demote, suspend, threaten, harass, or otherwise punish you for giving information to the IRS, helping with an investigation, or testifying in a tax proceeding.⁶ If retaliation happens, you can file a complaint with the Secretary of Labor within 180 days. If the Department of Labor does not issue a final decision within 180 days of your complaint, you can sue in federal district court.¹³

A successful retaliation claim can get you reinstatement, double back pay plus full lost benefits with interest, and compensation for special damages including attorney fees and litigation costs. These protections cannot be waived by an employment agreement, and any predispute arbitration clause that would force you to arbitrate a retaliation claim is unenforceable.

If Your Award Is Denied or Too Low

You can appeal an award decision to the U.S. Tax Court, which is the only court with jurisdiction over whistleblower award disputes.¹⁴ You have to file your petition within 30 days of the date the Whistleblower Office sends its final determination letter. Miss that deadline and you lose the right to judicial review.³ The appeal right applies to both Section 7623(b) and Section 7623(a) claims. If you agreed to the award and no determination letter was issued, the 30-day clock starts the day the Whistleblower Office issues your award check.

1
Internal Revenue Service. Whistleblower Office at a Glance
2
Office of the Law Revision Counsel. 26 USC 7623 – Expenses of Detection of Underpayments and Fraud, Etc.
3
Internal Revenue Service. 25.2.2 Whistleblower Awards
4
eCFR. 26 CFR 301.7623-1
5
eCFR. 26 CFR 301.7623-4 – Amount and Payment of Award
6
Office of the Law Revision Counsel. 26 USC 7623
7
Internal Revenue Service. Submit a Whistleblower Claim for Award
8
Internal Revenue Service. Whistleblower Office Announces New Digital Form 211
9
Internal Revenue Service. The Whistleblower Law
10
Internal Revenue Service. 3.28.2 Information Referral Process for Form 3949-A
11
Internal Revenue Service. Withholding Rates for Whistleblower Award Payments
12
Internal Revenue Service. Updates to Internal Revenue Manual (IRM) 25.2.2
13
U.S. Department of Labor. Taxpayer First Act (TFA)
14
Internal Revenue Service. 35.3.2 Jurisdictional Defects