Readers of the Corporate Whistleblower Blog will also be interested in learning about the whistleblower-reward program operated by the Internal Revenue Service.  The program provides awards to individuals who provide the IRS with information leading to collection of unpaid taxes in amounts over $2 million.  This past April, the tax agency paid $4.5 million – [...]

According to the Internal Revenue Service’s “Fiscal Year 2010 Report to the Congress on the Use of Section 7623,” a report that the IRS recently released to Congress, more tax whistleblowers are coming forward and, under new whistleblower program rules, they are likely to see faster results from the IRS Whistleblower office. Not only did whistleblowers increase by 30 percent between fiscal years 2009 and 2010, but also total whistleblower rewards more than tripled from $5.8 million to $18.7 million. The IRS pays between 15 and 20 percent of recovered taxes, interest and penalties collected from disputes exceeding $2 million. Before the passage of the Tax Relief and Health Care Act of 2006, the IRS could choose whether or not to pay whistleblowers – today, under Section 7623(b), the payout is mandatory.

Since 2007, the State of New York has allowed whistleblowers to use the state’s False Claims Act to sue on behalf of the state, in what is known as a qui tam suit, when they identify Medicaid fraud or contractors who have overbilled the state for goods and services. This month, Governor David A. Paterson [...]