The Internal Revenue Service (IRS) has proposed new regulations addressing the processing and awarding of bounties to whistleblowers who provide information relating to underpayments of tax or violations of the Internal Revenue Code. +77 FR 74798. Public comments and requests for a public hearing on the proposed rulemaking must be received by February 19, 2013.
The regulations address procedures for the following:
Submitting tips and filing claims for awards;
Whistleblower administrative proceedings relating to awards claims; and
Determining the amount of awards and the process for award payment.
The regulations do not enlarge the list of ineligible claimants in current regulations, but the agency specifically solicits comments in this area. In addition, the proposed rules would require individuals to file formal award claims, and raise the possibility of accepting electronically filed claims at a later date.
The IRS bounty program offers bounties of up to 30 percent of the total taxes collected through qualifying information provided by a whistleblower. In August, the bounty program awarded a single bounty of $104 million. However, the program has been criticized by Senator Chuck Grassley of Iowa for delays in processing whistleblower claims.
Employers should note that the proposed procedures, which require a more formalized process for award claims, could potentially narrow the scope of eligibility for awards.