How does the Award Determination Process work?

If the IRS sends you a letter within a year of your filing of a Form 211 that they will not be able to pay you an award, you can be relatively certain that they did not use your information to audit the taxpayer.  In such case, there is really no point appealing the award determination because the IRS can only pay you if they collect tax, and if they never audited the taxpayer using your information then there is no tax payment to share with you as an award.  However, you do have a right to an Appeal in such case.

If the IRS does use your information, then you should seriously evaluate your appeal rights when it comes time for your award determination.  You have a right to an appeal if your award was $0 or $1,000,000, the dollar amount actually doesn’t matter.  Through your award appeal process you can uncover how much of your information the IRS used, how much they collected, what actions they took with your information, and what award percentage was applied to your case.

Tax Court whistleblower appeals
The United States Tax Court, Washington, D.C.

The Whistleblower Office communicates their award determination in writing to the informant. These final determinations regarding awards under section 7623(b) may, within 30 days of such determination, be appealed to the United States Tax Court.  Award determinations made under section 7623(a), primarily being cases where less than $2,000,000 was collected from the taxpayer, may not be appealed to the Tax Court.

The IRS has developed an administrative process whereby they will notify a whistleblower of a proposed award determination in advance of making their final determination.  In this appeal process the Whistleblower could then discover how the IRS used their information, how much the IRS collected, etc.  A Whistleblower would then have a right to present their case to the Whistleblower Office about why their information should lead to the maximum award possible based on the facts and circumstances.

If an informant appeals an award determination to the U.S. Tax Court or administratively before the IRS, the informant may benefit from hiring an attorney who is licensed to appear before the Tax Court and who is licensed to practice before the IRS.  While hiring an attorney does not guarantee that the Tax Court or IRS will increase the award payment, but hiring an attorney will help protect your rights in this process.  The best way to increase your award payment is to give the IRS the most complete package of information upfront and to get them motivated by the solid case you have presented to them.