On December 20, 2006, the President signed into law the Tax Relief and Health Care Act of 2006 (“the Act’).
Click here to read key parts of the new law, as codified in the United States Code.
Section 406 of the Act dramatically strengthens the IRS’s whistleblower program, by increasing available rewards and creating a reliable enforcement mechanism for whistleblowers to collect them. Under prior rules, the maximum award generally available to whistleblowers was 15% of funds recovered by the IRS (including penalties, taxes and interest). Section 406 establishes a floor of 15% and increases the cap to 30%, in those cases where the IRS pursues an administrative or judicial action against a taxpayer based on information brought to its attention by the whistleblower. Moreover, while whistleblowers were unable to enforce their claims to awards under the old program (unless they had a contract with the IRS), the new legislation provides that payments to qualified whistleblowers are mandatory, and it permits whistleblowers to appeal IRS award determinations to the Tax Court. If they are successful, whistleblowers will be permitted to take an above-the-line deduction for attorney’s fees and costs paid by them to recover their award.
The following guidelines, set forth by the IRS, describe some of the key features of the program, codified at 26 U.S.C. 8723(b):
Please be advised that this website is an information resource and is not intended to provide legal advice in your particular case. We would be pleased to conduct a confidential review of your potential claim, but by doing so we are not agreeing to act as your counsel. A written agreement between you and the Law Offices of Paul D. Scott is prerequisite to representation. Past successes by the firm do not guarantee future results.
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