The IRS is Encouraging Whistleblowers to Report Corporate Tax Fraud

Since its establishment in 2007, the IRS’ Whistleblower Office has awarded more than $1.3 billion to whistleblowers who have helped the agency recover more than $7 billion in delinquent taxes, interest, and penalties. Now, the Whistleblower Office is revamping its operations to encourage even more whistleblowers to come forward. For corporate taxpayers, whistleblower complaints can create substantial liability exposure, and even when a whistleblower’s allegations are unfounded, avoiding unnecessary liability requires the representation of an experienced Washington D.C. tax lawyer.

IRS Whistleblower Program Provides “Invaluable Deterrence Against Non-Compliance with Tax Laws”

In an April 18, 2025 News Release announcing updates to the IRS’s Whistleblower Program, the IRS notes that whistleblowers play a critical role in the agency’s ongoing fight against corporate tax evasion and tax fraud. The News Release notes that “whistleblower information significantly boosts revenues,” and that the agency’s Whistleblower Program provides “invaluable deterrence against non-compliance with tax laws.”

The IRS relies on whistleblowers to help it uncover all types of corporate tax violations. While the IRS uses a variety of other means to uncover corporate tax violations as well, it has worked with whistleblowers to pursue enforcement in cases involving:

• Corporate income tax evasion and tax fraud
• Corporate payroll tax evasion and tax fraud
• Fraudulent corporate tax deductions, credits, and exemptions
• Fraudulent claims for government program benefits (i.e., PPP and ERC fraud)
• Abusive corporate tax shelters
• Offshore asset disclosure violations
• Accounting fraud and other forms of corporate financial fraud

Under the terms of the IRS’ Whistleblower Program, the requirements for securing protected whistleblower status are fairly minimal. The IRS is also one of a limited number of federal agencies that offer financial rewards to whistleblowers who assist with successful enforcement actions. As a result, whistleblowers will often have strong incentives to come forward, and when they come forward, corporate taxpayers will often face an uphill battle to avoid additional liability.

Is Your Company Facing an IRS Whistleblower Complaint?

When facing scrutiny from the IRS, determining the source of the inquiry is a critical first step toward developing and executing a sound defense strategy. Responding to a routine corporate tax audit and responding to criminal tax fraud allegations from a whistleblower are two very different scenarios. Once you know why the IRS is looking into your company’s filing history, then you can focus on building a defense strategy that is tailored to the specific circumstances–and risks–at hand.

In all cases, a proactive approach is essential for avoiding unnecessary consequences. If your company is facing an IRS whistleblower complaint, your focus should be on resolving the inquiry before it leads to formal charges. We can help, but it is important that you contact us as soon as possible.

Request a Confidential Consultation with Washington D.C. Tax Lawyer Kevin E. Thorn

If your company is facing scrutiny from the IRS as a result of a whistleblower complaint, we can take action promptly to intervene in the IRS’ investigation and implement a targeted defense strategy. To speak with Washington D.C. tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, in confidence, call 202-349-4033 or tell us how we can reach you online now.