IRS Beefs Up Whistle-blower Awards Program

Monday, November 17, 2014
By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

The Internal Revenue Service (IRS) is hoping that a change in the law and the possibility of a big payout will encourage more whistle-blowers snitching to authorities. Few people are aware of this program.

The IRS issued brand new regulations for its own whistle-blower program in August 2012. These were written to recruit more whistle-blowing moles to help flush out financial fraud. The biggest differences in the new IRS regulations are the expansion of eligible whistle-blowers, the focus on keeping the whistle-blower's identity confidential, and an increased effort to expedite the award process in a timely manner.

Click here to read the new regulations.

Guidance on IRS Whistle-blower Program.

The IRS acknowledges the value of utilizing whistle-blowers for compliance efforts. The new regulations remove a provision that excluded state and local employees, thus expanding the scope of people eligible to bring forth complaints and recoup awards.

Within the regulations, the IRS states it will strive to protect both the identity and existence of the whistle-blower from anyone that is not on a "need to know" basis.

The IRS pays awards to whistle-blowers at its discretion. According to the regulations, whistle-blowers will receive an award of at least 15 percent, but not more than 30 percent, of the collected proceeds resulting from the information provided by a whistle-blower.

The regulations also clarify how whistle-blowers can participate in the award process. Whistle-blowers will have 30 days to respond to a preliminary award determination, preliminary denial letter or preliminary award recommendation letter. The IRS managed Whistle-blower Office will provide a detailed report to the whistle-blower, and whistle-blowers may review information in the administrative claim file after signing a confidentiality agreement.

Why is the IRS Improving Conditions for Whistle-blowers?

Thousands of whistle-blowers have reported hundreds of millions of dollars in suspected compliance issues, resulting in a wide range of audits and investigations. Many of the audits yielded significant results for the IRS. In fact, in the last three years the IRS paid out more than $186 million in awards on collections of more than $1 billion based on whistle-blower information.

The IRS Deputy Commissioner for Services and Enforcement recently released a statement on the success of the whistle-blower program. According to the statement, in the future the IRS wants to prioritize the whistle-blower program, and improve the relationship with existing and potential whistle-blowers.

Click here to read the commissioner's full statement.

It's Snitching Season.

The IRS is essentially naming whistle-blowers their go-to sources for fraud investigations. The agency is striving to make coming forward with information as easy as possible. You can bet there will be an increase of complaints coming out of the woodwork.

As a physician or healthcare professional, you are held to a higher standard. Eyes are constantly on you in not only your daily routines but every decision you make in your profession. Know that anyone may be willing to blow the whistle on you over one wrong move. With the IRS's improved conditions for coming forward, they have nothing to lose and a lot to gain. Don't leverage your career by banking on the idea that no one is looking.

You are also accountable for those you employ and work alongside. It is vital to your success and career to protect yourself against charges that could ruin your livelihood. Simply instilling a moral code of conduct and implementing a system of checks and balances amongst a team you can trust can be the difference between success and failure. No financial kickback or fraudulent claim is worth losing your hard earned license and career over.

To read more on whistleblower cases, read our two-part blog. Click here for part one, and click here for part two.


What is your biggest fear when it comes to whistle-blowing? Do the new IRS regulations put those fears to rest? Why or why not? Please leave any thoughtful comments below.

Contact Health Law Attorneys Experienced with Qui Tam or Whistle-blower Cases.

Attorneys with The Health Law Firm also represent healthcare professionals and health facilities in qui tam or whistle-blower cases both in defending such claims and in bringing such claims. We have developed relationships with recognized experts in healthcare accounting, healthcare financing, utilization review, medical review, filling, coding, and other services that assist us in such matters. We have represented doctors, nurses and others as relators in bringing qui tam or whistle-blower cases, as well.

To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

Tag Words: Internal Revenue Services, IRS, whistleblower program, whistleblower protection, whistleblower award, whistleblower incentive, IRS whistleblower award program, whistleblower attorney, whistleblower lawyer, defense attorney, defense lawyer, fraud defense, fraud prevention, fraud schemes, qui tam, qui tam attorney, qui tam lawsuit, qui tam lawyer, whistleblower protection

"The Health Law Firm" is a registered fictitious business name of George F. Indest III, P.A. - The Health Law Firm, a Florida professional service corporation, since 1999.
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George F. Indest III 11/17/2014

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