Posts Tagged ‘6103(n) contract’

IRS Whistleblower Office Will Not Enter Into Contracts With Tax Whistleblowers

IRS whistleblowerAs of March 24, 2008, the IRS whistleblower office may enter into contracts with the Tax Whistleblower.  Treasury Department issued Treas. Reg. § 301.6103(n)-2T, which provides an exception to the anti-disclosure provisions under I.R.C. § 6103 t.  Generally, the IRS is prohibited from disclosing taxpayer information to anyone other than the taxpayer and the taxpayer’s representative.    Treas. Reg. § 301.6103(n)-2T creates an exception, which states that the IRS can disclose taxpayer information to the IRS Whistleblower regarding

the status of the [tax] whistleblower’s claim for award under section 7623, including whether the claim is being evaluated for potential investigative action, or is pending due to an ongoing examination, appeal, collection action, or litigation.” 

The regulation also requires that a contract must be in place prior to any disclosure, and the IRS has discretion to enter into a contract or not.

The Tax Whistleblower Law Firm interpret Treas. Reg. § 301.603(n)-2T to allow the IRS to keep a Tax Whistleblower informed as to the status of the Whistleblower’s case.  However, the IRS Whistleblower Office that handles the Tax Whistleblower Reward Program has interpreted Treas. Reg. § 301.603(n)-2T as strictly as possible and are limiting the applicability of the regulation.  According to the Tax Whistleblower Law Firm the IRS Whistleblower Office is not entering into any contracts with IRS Whistleblowers, which would allow for the disclosure of information regarding the status of the Whistleblower’s case.  Instead, the Whistleblower Office is limiting the application of the regulation to “6103(n) contracts.”  A “6103(n) contract” is entered by the IRS when the IRS needs the input of a third-party for purposes of analyzing information related to an investigation.  For example, if the IRS obtains a document from a taxpayer and requires assistance from a Whistleblower to interpret the document’s meaning, the IRS will enter into a “6103(n) contract” before showing the document to the Whistleblower.  A “6103(n) contact” does not necessarily allow the IRS to update the Whistleblower regarding the status of the Whistleblower’s case. 


Because of the repercussions of a violation of I.R.C. § 6103, the principals of believe that the Whistleblower Office is taking the most conservative approach possible regarding the application of the regulation.  IRS employees can be fired, sued, and imprisoned for an unauthorized disclosure in violation of I.R.C. § 6103.  Thus, it is only natural for the Whistleblower Office to strictly construe the new regulation.  Therefore, the Tax Whistleblower Law Firm suspects that a statutory amendment is necessary to carry-out the intent of the regulation.  In the meantime, the IRS Whistleblower Office is affirmatively refusing to enter into contracts with Whistleblowers.  The IRS Whistleblower Office has notified the Tax Whistleblower Law Firm that, since the passing of I.R.C. § 7623–the legislation that created the Tax Whistleblower Reward Program, the IRS has not entered into a single Whistleblower contract.

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