On December 20, 2006, the Tax Relief and Health Care Act of 2006 was enacted. Section 406 of the Act amends Internal Revenue Code (IRC) 7623 concerning the payment of awards to whistleblowers. The amendment made significant changes to the IRS award program and also required the establishment of a Whistleblower Office within the IRS, which has responsibility for the administration of the award program. The 2006 amendments re-designated the prior IRC 7623 as IRC 7623(a), added new provisions as IRC 7623(b), and included program administration requirements that were not incorporated into the Internal Revenue Code.

The Bipartisan Budget Act of 2018 added a new subsection (c) to IRC 7623. This defined the term proceeds to include penalties, interest, additions to tax, and additional amounts provided under the internal revenue laws, and any proceeds arising from laws for which the Internal Revenue Service is authorized to administer, enforce, or investigate. This includes criminal fines and civil forfeitures, and violations of reporting requirements.

On July 1, 2019, Section 1405(a) of the Taxpayer First Act (TFA) of 2019 amended IRC 7623 and 6103, adding several important provisions to help improve whistleblower services. In addition, TFA of 2019 created protections of whistleblowers against retaliation.

Operating at the direction of the Commissioner of the IRS, the WO coordinates with other IRS units, analyzes information submitted, and makes award determinations.

On December 20, 2006, the Tax Relief and Health Care Act of 2006 was enacted. Section 406 of the Act amends IRC 7623 concerning awards to whistleblowers. The amendment made significant changes to the IRS award program and also required the establishment of a WO within the IRS, which has responsibility for the administration of the award program. The 2006 amendments re-designated the prior IRC 7623 as IRC 7623(a), added new provisions as IRC 7623(b), and included program administration requirements that were not incorporated into the Internal Revenue Code. In addition, the Act explicitly provides that the WO may determine whether to proceed with an action or refer the claim to another division for their consideration.

The authority to determine and approve awards under IRC 7623 for individuals who provide information to the IRS related to the detection of underpayments of tax, or to the detection and bringing to trial and punishment of persons guilty of violating the internal revenue laws or conniving at the same is delegated to the Director of the WO under Delegation Order 25-7 (Rev 5).

The operating divisions do not have authority to determine or approve awards under IRC 7623. The operating division completes and submits Form 11369 (See IRM 25.2.1.5.5, Form 11369 Requirements). The WO will evaluate and apply all facts to the applicable laws, policies, and procedures to determine and approve awards.

The WO collaborates with Small Business Self Employed’s (SBSE) Initial Claim Evaluation (ICE) Team to perform various tasks throughout the Form 211 claim process. Items sent to the ICE Team are considered sent to the WO.

In some instances it may be in the best interest of the Government to have a formal agreement with the whistleblower when it is necessary to share IRC 6103 protected information obtained by the IRS from the taxpayer or a third party with the whistleblower. In these situations, 26 CFR 301.6103(n)-2 authorizes a contract for services with the whistleblower. The organization taking action on the claim is responsible for evaluating whether an IRC 6103(n) contract should be pursued (See IRM 25.2.1.6, IRC 6103(n) Contract, General).

Claim: A claim is a whistleblower’s application for an award. A whistleblower makes a claim for award by filing Form 211, Application for Award for Original Information, with the WO. The claim for award includes an information submission that is the basis for the claim. When a whistleblower files more than one Form 211 with the WO, the WO will analyze the Form 211 to determine whether it is a new submission or a supplemental submission that relates to an existing claim.

Claim File: A claim file is the record of the investigation of the information submitted by the whistleblower. See IRM 25.2.1.5.6, Whistleblower Claim File, for a description of what is contained in the file.

Denial: A denial is a determination that a claim is not eligible for an award. The table below contains denial reasons and their corresponding descriptions:

Examination: References in this IRM to an examination, also extend to other IRS proceedings, including audit, investigation, collection, and revocation.

Form 11369 Package: The Form 11369, Confidential Evaluation Report on Claim for Award, and any required attachments.

Investigation: References in this IRM to an investigation, also extend to other IRS proceedings, including audit, investigation, collection, and revocation.

Rejection: A rejection is a determination that relates to the whistleblower’s eligibility to file a claim for award, or the submission of information and claims for award (i.e., failure to sign under penalties of perjury, incomplete Form 211 or the IRS was unable to identify the taxpayer based on the information provided by the whistleblower).

Submission: Submission is an internal term used by the WO to refer to a claim (or group of claims aggregated by the WO for administrative purposes).

ARC - Award Recommendation and Coordination

CDO - Case Development and Oversight

ICE - Initial Claim Evaluation

OD - Operating Division

POA - Power of Attorney

PSP - Planning and Special Programs

SME - Subject Matter Expert

SPPO - Strategic Planning and Program Operations

WO - Whistleblower Office

The following resources provide additional information on the WO:

Classifiers must use sound judgment, technical expertise, professional knowledge and experience to identify complex, as well as obvious issues. The classifier will determine whether the information should be forwarded for further review. Those claims not forwarded for further review can be denied based on classification’s rationale for not forwarding the claim. The recommendation from classification reflects an enforcement decision of the operating division.

Classification’s role is only to determine if the information on the Form 211 warrants further review. It is not classification’s responsibility to determine whether a whistleblower is entitled to an award.

These steps are general procedures which should be followed on all whistleblower claims.

Considering Relevant Information and attachments. The first step in classifying the Form 211 submission will be reviewing the Form 211 and any attachments or additional information provided by the whistleblower. If the claim contains multiple Forms 211, classification needs to consider each Form 211 on its own merits. Normal risk analysis techniques should be utilized in determining whether to forward the information for further investigation. If the Form 211 is regarding an individual having personal expenses paid for by an entity, then the classifier cannot select/consider the individual without the entity. Review relationships in the allegations, to determine what entities impact the issues.

Determine whether the allegations meet threshold tolerances. Classifiers should follow the guidance for Materiality/Significance of the Issue found in IRM 4.1.5.3, Classification.

Review relevant return information. Utilize resources available to the classifier. This may include, EUP, IDRS, YK1, Accurint, Tier Structure Tool, CKGE and other appropriate intranet and internet sources. Review all relevant returns necessary to fully consider the claim. This may include related taxpayers and/or prior/subsequent tax periods.

Consider whether the claim contains an actionable issue. Claims are considered non-actionable if the claim lacks any basis or viability. If the allegations are based on or supported by information, including public information, then the claim should be further reviewed. If the submission does not contain an actionable issue, or offers no basis or rational, then no further review is required.

Determine whether the tax year(s) in question has/have a viable assessment statute. Follow your operating division’s guidelines for statutes. If the allegations are specific to a closed year, or a year with minimal time remaining on the statute, consider whether the issues/information could be applicable to a current year (e.g., timing issues, methods of accounting, or issues which may be recurring in nature).

Determine whether the claim should be forwarded or coordinated with another operating division.

Determine whether the information meets the operating division’s criteria for selecting for field exam or referring to the subject matter expert (SME).

Determine whether the information should be forwarded for further investigation.

The claim involves a future year that has not been filed – the claim should be returned to the WO with instructions to return the claim for consideration once the return has been filed. Provide a follow-up date the WO should send the claim back to classification. The follow-up date should not be earlier than the required filing date and no later than the due date with extension.

Classification suspects the information is already known to the IRS or otherwise adds no value to an existing audit. This is not a determination that can be made at the classification level. This determination can only be made by the field. Consider the information, perform risk analysis, and select or deny the same as any other claim. If there is an existing audit, then let the exam team consider the information. If the claim is regarding an audit or other action that has closed, then contact the WO.

The information provided by the whistleblower is publicly available information, the whistleblower has no firsthand knowledge of the issue. This is not a determination which can be made at the classification level. Classification must still consider the information and compare it to the return to determine if a potential tax issue exists. Congress authorized payment on information obtained from various public sources in IRC 7623. Claims submitted with publicly available information must still be considered, regardless of the whistleblower’s firsthand knowledge of the situation.

In general, documentation should provide enough detail to support the recommendation. At a minimum detail should include:

In the case of a recommendation to deny the claim, the documentation should clearly state the reason the classifier felt the claim should be denied. The WO may need to provide the basis for the denial to the whistleblower and will need adequate explanation/support of the operating division’s recommendation.

In the case of a referral to an examination team or SME, the documentation should clearly identify why the claim is being referred stating all relevant information. This will avoid duplication of efforts by the field/SME.

The recommendation from classification reflects an enforcement decision of the operating division.

If a decision is made to assign the claim to the field, then the classification function is responsible for providing the following information to the WO:

If a decision recommends denying the claim, then provide the agreed upon classification sheet or the Form 11369, Confidential Evaluation Report on Claim for Award, to the WO. Follow instructions attached to the form and IRM. Common reasons for denial are:

If the classification function determines the whistleblower’s information warrants referral for further investigation, the classification function will notify the WO (see IRM 25.2.1.3.5, Notifying the WO of Classification’s Recommendation). The classification function should follow existing procedures to forward the whistleblower claim to appropriate group or subject matter expert in accordance with the operating division’s instructions:

The WO will place an AIMS ICE indicator "1" to identify examination cases for which there is a whistleblower claim. For returns already established on AIMS, the WO will input the ICE indicator "1." The examination case cannot be closed on AIMS unless the ICE indicator is changed from a "1" to a "2" by the WO. This will be completed after the WO has verified the operating division has provided all of the necessary information needed to make an award determination. IRM 25.2.2.5, Information and Whistleblower Awards - Whistleblower Awards, Post Field Review.

Submissions may be referred to Case Development and Oversight (CDO) for coordination/oversight if the submission is a bulk submission.

Bulk submissions are defined as submissions containing 20 or more claim numbers that the operating division classifier would forward for further investigation.

Submissions containing fewer than 20 claim numbers for further investigation will not be sent to CDO for assignment.

The SME will evaluate the Form 211 and accompanying information to determine whether it may materially contribute to the identification, development or resolution of taxpayer liability or collection issues.

If during the SME’s review, information is identified that cannot be used, the information deemed to be tainted should be returned to the WO Analyst assigned the claim along with any analysis received from Counsel regarding the use of the information. The integrity of the tax case is preserved by withholding that information from the auditor or investigator, and ensuring that the SME is not involved in the examination.

The SME may consult with operating division Counsel to identify any potential legal issues in developing the issues presented by the whistleblower, and may decide to obtain additional subject matter expertise for a team analysis of the matter. The initial legal advice should address possible limitations, if any, identified on interactions with the whistleblower and other issues including the potential application of privileges.

SMEs are the only individuals in the operating division that may debrief a whistleblower. However, the SMEs may involve others in the debriefing call.

The SME will make a decision to refer the claim to the field or recommend denial of the claim.

The SME coordinates IRC 6103(n) contracts with exam, the whistleblower, and Counsel. See IRM 25.2.1.6.1, IRC 6103(n) Contract Guidance.

A debriefing may yield additional information that the whistleblower did not recognize as relevant to the taxpayer’s matters, information about the credibility of the whistleblower, information relevant to legal issues that can affect the use of documents, and lead to other sources of information. It can aid in understanding complex issues or hidden relationships, or identify connections between the taxpayer and others who may be involved in the alleged noncompliance.

A debriefing may also clarify the whistleblower’s submission.

Exhibit 25.2.1-1, Debriefing Checksheet, contains information that must be reviewed with the whistleblower and their representative, if applicable, at the start of the debriefing.

Generally, the SME will debrief the whistleblower on all claims referred to them unless the SME determines that a debriefing is unlikely to result in information that would be material to the evaluation of the submission. Instances a SME may choose to forgo the opportunity to debrief the whistleblower include, but are not limited to:

A decision not to perform a debriefing must be specifically explained in the claim record, including documentation in e-Trak.

All debriefing notes, including audio recordings, must be included in the whistleblower claim file and uploaded to e-Trak.

Debriefing the whistleblower with respect to any supplemental submission is at the discretion of the operating division.

One of the primary functions of the SME is to insulate the investigation functions from contact with information that may jeopardize any adjustments (or resulting collections).

The taint review refers to the part of the whistleblower process where the SME (with help from Counsel and the WO as needed) evaluates the organization’s ability to forward the information provided by the whistleblower.

Tainted information can include, but is not limited to, information that was illegally obtained by the whistleblower, or subject to a valid claim of privilege.

Information the taint review determines is privileged will not be further used by the IRS and must be returned by the SME to the WO.

It is the responsibility of the SME to identify information and documents that are potentially subject to a valid claim of privilege. Counsel will then make a final determination if privilege exists or if there is insufficient evidence to confirm that there is no privilege.

If a decision is made to assign the claim to the field, then the SME is responsible for providing the following information to the WO regarding the claim being forwarded to the field:

If a decision recommends denying the claim then provide the Form 11369, Confidential Evaluation Report on Claim for Award, to the WO. Follow instructions attached to the Form and IRM. Common reasons for denial are:

SME suspects the information is already known to the IRS or otherwise adds no value to an existing audit. Generally, this is not a determination that can be made without considering the field’s information (e.g., workpapers, risk analysis, audit plan, etc.). This determination is made by the WO after any operating division investigation by reviewing the field’s information submitted with the Form 11369 (including workpapers, lead sheets, risk analysis, audit plan, activity record, etc.). Consider the information, perform risk analysis, consider the claim for the debriefing requirement, and forward for investigation or deny the claim. If there is an existing audit then let the exam team consider the information. If the claim is regarding an audit or other action that has closed, then contact the WO.

The information provided by the whistleblower is publicly available information, the whistleblower has no firsthand knowledge of the issue. The SME must still consider the information and compare it to the return to determine if a potential tax issue exists. Congress authorized awards for information obtained from various public sources in IRC 7623. Claims submitted with publicly available information should still be considered, regardless of the whistleblower’s firsthand knowledge of the situation.

ICE indicators are generally placed on tax modules in AIMS that relate to a whistleblower claim.

Once the WO has received and reviewed the complete Form 11369 package, the ICE indicator will be updated as follows:

The WO will update the ICE indicator within 30 days of the date a properly completed Form 11369 is received. Cases with a short statute (90 days or less remaining on the statute) will be expedited.

In general, normal audit steps should be followed in these cases. The work to conduct an investigation of a whistleblower issue(s) is no different from the work performed in other cases, including the development of civil or criminal fraud when applicable. Field personnel should be cognizant of the badges of fraud.

Normal risk analysis techniques should be utilized in determining whether to initiate an audit of the taxpayer and/or issue. The decisions to survey or audit the return is determined based on this risk analysis. The scope of the exam is determined by the examiner/team.

Issues that are alleged by whistleblowers should be corroborated using independently developed information. This independently developed information will be the basis for any proposed assessment of liability.

Documenting Activity Record – When documenting the activity record there should be no reference to the whistleblower. When reviewing whistleblower information, the activity record documentation should be general such as, "Worked on gathering information for the development of [Issue Name] issue" . A separate activity record specifically for the whistleblower (which would remain in the whistleblower claim file separate from the audit file) must be kept for more details on what actions were taken involving the whistleblower information.

No information regarding the whistleblower can be included in exam’s administrative file. All information concerning the whistleblower must be returned to the WO in the Whistleblower Claim file. See IRM 25.2.1.5.6, Whistleblower Claim File.

A Form 11369 is required at the conclusion of the investigation regardless of whether the exam resulted in a survey, no-change, no-change with adjustments, agreed, or unagreed case. See IRM 25.2.1.5.5, Form 11369 Requirements.

If the audit of a case involving a whistleblower is expanded to other years or taxpayers, the examiner must contact the WO.

The WO will place ICE indicators on the appropriate modules and create new claim numbers if needed.

The identity or existence of a whistleblower must not be disclosed to anyone, including other IRS officials or employees except on a "need to know" basis in the performance of their official duties. There should be no mention of the whistleblower or the SME on any documents that will be associated with the examination case file.

To maintain maximum security and protect the whistleblower’s identity, keep all documents, screen displays, and forms secured. All employees are responsible for safeguarding and protecting information. Whistleblower information must be kept confidential. See IRM 10.5.1, Privacy and Information Protection, Privacy Policy.

To the fullest extent permitted by the law, the IRS will protect the identity of the whistleblower and will neither confirm nor deny the existence of a whistleblower. In some instances, however, it may be necessary and in the government's best interests to reveal the identity of a whistleblower in a judicial proceeding. The decision to disclose the identity of a whistleblower must be coordinated with Counsel and the WO. .

Any contact made between the IRS and the whistleblower is not considered a third party contact under IRC 7602(c)

Field personnel must obtain approval from the WO prior to sharing any information or documentation provided by a whistleblower outside of the IRS examination team. Requests must be directed to the WO SPPO Associate Director.

The Form 11369 package is a tool used to inform the WO about the investigation of the whistleblower’s information. The form and attachments will assist the WO in making an award determination.

The Form 11369 package should explain how the whistleblower's information was used, how it did or did not contribute to the identification and/or development of issue(s), and any other information that may assist the WO in making an award determination.

A Form 11369 and narrative is required for each relevant taxpayer affected by an IRS investigation (audit, collection, revocation, etc.). Taxpayers are relevant to a whistleblower submission when:

A narrative fully explaining the issues identified by the whistleblower and the whistleblower’s contribution, if any, to the investigation is mandatory and should be attached to each Form 11369. The narrative should include all relevant dates including when significant actions were initiated. This must include detailed feedback on how the whistleblower’s information was used in any IRS investigation; regardless of whether the laws administered, enforced, or investigated are outside of Title 26. This feedback must also include information regarding other agencies involved and which agency has jurisdiction of the proceeds, if applicable.

A completed Form 11369 package must be submitted to the WO in order to have the ICE indicator updated in AIMS. A completed Form 11369 must also be submitted to the WO prior to transferring a whistleblower claim to another group, area, or operating division (such as CI or Appeals).

If the Form 11369 package is incomplete, the WO will:

The WO will review the information provided on the Form 11369 to determine whether the whistleblower’s information substantially contributed to an action. The WO may need to contact the operating division or the RA/SA/RO team to obtain additional information or to review related files. Communication protocol developed between the operating division and the WO will be followed regarding how the team will be contacted.

It may take the WO up to 30 days to update the ICE indicator after the Form 11369 is received from the investigating function. The ICE Indicator will not be updated until the entire claim file is reviewed and accepted by the WO employee assigned to the case. If a Form 11369 package is missing information, it may take longer than 30 days to update the ICE indicator.

You must return the whistleblower claim file (See IRM 25.2.1.5.6, Whistleblower Claim File) to the WO. To expedite the processing of the Form 11369 exam may fax the information to the ICE team at 855-244-3575. However, you must return the whistleblower claim file and Form 11369 package to the WO within one day of faxing or emailing the information. The whistleblower claim file must be mailed to:
Internal Revenue Service
ICE Team
1973 N. Rulon White Blvd. M/S 4111
Ogden, UT 84404

If the claim was initially forwarded by an analyst in the WO through the SME then the Form 11369 package should be returned to the forwarding WO analyst (and through the SME if operating division procedures require it). If uncertain who the WO analyst is or whether this applies, contact the WO's ICE Team at (801) 620-2172.

Examination must maintain a separate whistleblower claim file for storing information related to the whistleblower claim. When documenting activity, the activity record must not have any references to the whistleblower. Instead a separate activity record must be maintained in the whistleblower claim file. The following should be stored/maintained in the whistleblower claim file:

At the conclusion of the examination the whistleblower claim file must be returned to the WO with the Form 11369. IRM 25.2.1.5.5, Form 11369 Requirements, and the accompanying subsection lists additional information required to be submitted to the WO with the whistleblower claim file and the Form 11369.

The file exam forwards to Appeals (unagreed) or Centralized Case Processing (agreed) must NOT contain any whistleblower information.

Freedom of Information Act (FOIA) Requests - FOIA requests for release of information on a whistleblower claim requires approval of the WO Director. Field personnel are not permitted to provide any whistleblower information to the IRS Disclosure Office. FOIA requests for disclosure of whistleblower information are processed by the WO and release of whistleblower information must be approved by the WO Director. FOIA requests including whistleblower information must be directed to the WO SPPO Associate Director.

The following outlines the principles and steps to be followed when considering a IRC 6103(n) contract with a whistleblower. Additional guidance can be found at 26 CFR 301.6103(n)-2 and should be consulted for specific guidance and definitions.

A debriefing interview should be conducted first by the SME prior to consideration of a contract. If necessary, a secondary debriefing should be completed to clarify any submitted information and the knowledge of the whistleblower prior to entering into a contract. The secondary debriefing could be done after the claim is in the field so the field could have input in the questions asked.

Exam team(s) should evaluate whether the claim is one in which the disclosure of return information to the whistleblower and ongoing interaction with the whistleblower would benefit tax administration and promote the effective resolution of the issues. In coordination with Division Counsel, exam teams should also consider evidentiary risks of ongoing interaction with the whistleblower, for instance, entering into a IRC 6103(n) contract with a whistleblower currently employed by the entity being examined could be viewed as engaging the whistleblower as an agent of the IRS. Also, entering into a IRC 6103(n) contract with a whistleblower that has access to privileged and confidential information could cause concerns under the exclusionary rule and the attorney-client or other privileges. Exam team(s) considering a IRC 6103(n) contract should ensure the premises of the whistleblower are consistent with IRS requirements set forth in Pub 4812, Contractor Security Controls.

Some examples of factors where, if present, a IRC 6103(n) contract should be considered are:

The decision to use a IRC 6103(n) contract to develop an examination or investigation with the assistance of a whistleblower ultimately rests with the operating division.

When an Exam team believes a contract is appropriate, a request should be initiated through the SME. Approval is required by the executive responsible for the team and final approval by the operating division at no lower than the Deputy Commissioner level.

If approved, the SME will contact the whistleblower and whistleblower’s representative to confirm that the whistleblower wants to enter into and execute such contract. All IRC 6103(n) contracts must be coordinated with Division Counsel, General Legal Services (GLS), Procedure and Administration, and Procurement.

The SME will provide the WO notice of any IRC 6103(n) contract and send a copy of the contract within ten days. These contracts will be tracked by the WO. After receiving notice, the WO will provide notification of the contract to the Deputy Commissioner’s (Services and Enforcement) Office. However, questions regarding the contract terms/conditions should be coordinated with local Field Counsel as necessary.

Employees considering such contracts should be aware of the limitations associated with sharing information pursuant to IRC 6103(n) contracts. A IRC 6103(n) contract does not allow the IRS to share all information with a whistleblower – only such information the IRS deems necessary in connection with the proper or reasonable performance of the contract. If the contract can be performed by sharing only parts or portions of the returns or return information, then only those parts or portions may be disclosed.

Further, as a condition of the contract, a whistleblower must agree that any return information disclosed will not be disclosed or otherwise used by the whistleblower except as expressly authorized by the IRS in writing.

Whistleblowers must be made aware that he or she becomes subject to civil and criminal penalties for the unauthorized inspection or disclosure of return information as provided in IRC 7431, 7213 and 7213A.

The regulations governing IRC 6103(n) contracts also provide that whistleblowers and their legal representatives who receive return information pursuant to a IRC 6103(n) contract must comply with all applicable conditions and requirements that the IRS may prescribe for purposes of protecting the confidentiality of the return information and preventing unauthorized disclosures and inspections of the return information. These requirements, which include standards for computer security, physical security of return information, and methods of destruction of return information, are set forth in Pub 4812. IT Security and Physical Security can be contacted via email at Pub4812@irs.gov to assist in the safeguard review and provide their respective expertise.

As part of a IRC 6103(n) contract, whistleblowers and their legal representatives who receive return information must agree to permit an inspection of their premises by the IRS relative to the maintenance of the return information disclosed to them under the contract. If the services contemplated by the IRC 6103(n) contract can be performed without the physical release of returns or return information to the whistleblower or the return or return information can be shared with the whistleblower in an IRS office, the IRS should retain control of the documents.