Tuesday, February 21, 2012
IRS Finalizes Whistleblower Regulations (2/21/12)
Today, the IRS published final regulations addressing certain issues under the whistleblower provision of the Code, Section 7623. The regulations are here and Section 7623 is here. Readers will recall that Section 7623 authorizes the IRS to pay awards from collected proceeds for information that results in the collection of tax, penalties and interest. Subsection (a) is a discretionary award in a suitable amount ("as the IRS deems necessary"). Subsection (b), the provision drawing the most interest, is a mandatory reward of at least 15% scaling up to 30%. In part relevant to this blog, the new regulations provide (applicable to both subsections) that the:collected proceeds include:
1. Amounts collected subject to reward do not include criminal fines.
2. Amounts collected subject to reward do include criminal restitution for tax order by the court.