The IRS has recently improved its “whistleblower” program in accordance with recent tax law changes. Some of the highlights are:

*If the IRS proceeds with any administrative or judicial action based on the information provided, the informant must be rewarded based on the amounts collected. This reduces the discretionary authority of the IRS.

*A whistleblower award must equal at least 15% (but no more than 30%) of the amounts collected in the investigation.

*The previous prohibition against including interest amounts when calculating the size of the reward is removed.

Note: In other situations where the IRS actions are based on an individual’s allegations, rather than specific information, the reward may be reduced to 10% of the collected amounts. This includes allegations arising from a judicial or administrative hearing; a governmental report, hearing, audit or investigation; or the news media.

Finally, tipsters may claim an above-the-line deduction for costs and attorney fees paid in connection with a whistleblower award.