Should a Tax Whistleblower in the New IRS Whistleblower Program Use an IRS Form 3949?

Question about the new IRS Whistleblower Rewards Program: if you go to the Internal Revenue Service’s website, the IRS notifies persons that, if they have evidence of suspected tax violations, they should use a Form 3949 and send it to an Internal Revenue Service Office in Fresno, California. While this blog is not legal advice, we have not seen a basis for individuals seeking a reward under the new IRS Whistleblower Program for blowing the whistle to utilize this form. The reason is because this form is not necessarily connected to the new IRS Whistleblower Program which came into being in December of 2006.

The Information Referral Form 3949A utilized by the IRS is a form that generically describes suspected tax fraud, but does not include within its provisions an application for a reward under the new IRS Whistleblower Program. The same is true for the old Form 211. While the IRS Form 211 arguably still applies to claims less that $2 million, because the new program pertains specifically to those seeking rewards concerning information for the payment of back taxes in excess of $2 million, we have not seen requirements that individuals applying for rewards use the Form 3949-A or send it blindly to the IRS in Fresno. While the information contained within the Form 3949A can be included in an application for a reward under the new Whistleblower program, simply sending in the Form 3949A may not be the equivalent of applying for the reward under the new Whistleblower Program as described in 26 U.S.C. ยง 7623.

Regulations on the new Whistleblower Program this fall may shed light on these questions. And again, since the facts vary from case to case and a blog cannot provide legal advice, please contact an attorney with experience with the IRS Whistleblower Program for guidance–either our firm or someone else with this experience.