Tax fraud is a headache for the U.S economy. The black money generated creates a sort of underground economy or parallel economy not under the supervision of the government. The government can’t find all tax evaders without the cooperation of its responsible citizens.
As a result common citizens must come forward to report such discrepancies. These types of people are popularly termed as whistle blowers. As they provide information against their organization where they work, they often face retaliatory measures by employers.
In order to secure their life at workplace and other types of protection the government has introduced several laws. Whistleblower Protection Act (1989) is one such act aimed to protect the interest of a Tax Fraud Whistleblower. There are several agencies taking care of complaints from a Tax Fraud Whistleblower. These agencies include- Office of Special Counsel, Merit Systems Protection Board and Court of Appeals in the Federal Circuit.
The benefits provided by the government to whistle blowers evolved and strengthened further after passing of Tax Relief and Health Care Act of 2006. The new alterations to the existing act have been more favorable to the whistle blowers. Previously, the rewards were at the discretion of IRS. Now a whistle blower can get a reward between 15%-30% of the total tax evasion recovery.