Tax Whistleblower Blog

Notice of Third-Party Contacts and Whistleblowers

The principals of www.RewardTax.com were recently asked a question by a Whistleblower, for which the answer is important enough to include in this blog.  The Whistleblower is very concerned about confidentiality and does not want the target to know that he was turned-in under the Tax Whistleblower Reward Program. 

The Whistleblower hopes that the IRS Revenue Agent, assigned to the audit of the target, will interview him and to give him a chance to answer any questions that the IRS has about the Form 211 package submitted under the Tax Whistleblower Reward Program.  However, the client asked whether the IRS Revenue Agent is required to disclose the identity of the Whistleblower in a Notice of Third-Party Contact. 

Pursuant to IRC section 7602(c), the IRS is required by law to provide a list of all third-parties whom they have contacted as part of their audit and investigation.  The target of an audit is allowed to view this list upon request.  The list, kept by the IRS, is generally referred to as Notice of Third-Party Contacts.  However, IRC section 7602(c) contains several exceptions, which relieve the IRS from the requirement of providing a Notice of Third-Party Contact.   Included in those exceptions are situations (i) where the IRS determines for good cause shown that such notice may result in reprisal against any person; or (ii) where there is any pending criminal investigation.  The principals of www.RewardTax.com believe that the IRS will utilize one or both of these exceptions in order to protect the confidentiality of Whistleblowers who submit packages under the Tax Whistleblower Reward Program.  “Reprisal,” as that term is used in the exception, is undefined; but logically would include physical retribution–such as harm or force–monetary retribution–such as loss of job–and harrassment–such as public defamation.  Therefore, the principals of www.RewardTax.com have assured their clients that, in most cases, the IRS will not breach confidentiality with a Notice of Third-Party Contact.