4.71.24  Whistleblower Claims

Manual Transmittal

August 03, 2015

Purpose

(1) This transmits revised IRM 4.71.24, Employee Plans Examination of Returns, Whistleblower Procedures.

Background

This revised IRM 4.71.24 provides guidance and information to assist EP personnel in processing Whistleblower Claims.

Material Changes

(1) This IRM has been revised to reflect that the WB Coordinator is now located in EP Classification

(2) This IRM has been revised to reflect that Document 6441 has been replaced with TDF 15-05.11 (SBU Cover Sheet).

(3) Other minor editorial changes, including revisions to reflect plain language requirements, were made throughout the document.

Effect on Other Documents

This supersedes IRM 4.71.24 dated March 7, 2014.

Audience

Tax Exempt and Government Entities
Employee Plans

Effective Date

(08-03-2015)

Robert S. Choi
Director, Employee Plans
Tax Exempt and Government Entities

4.71.24.1  (08-03-2015)
Overview

  1. On December 20, 2006, Congress made provision for the establishment of a Whistleblower Office within the Internal Revenue Service (IRS).

  2. The Whistleblower Office has responsibility for the administration of the informant award program under Internal Revenue Code (IRC) section 7623.

  3. IRC section 7623 authorizes the payment of awards from the proceeds of amounts the Government collects by reason of the information provided by the informant making the claim.

  4. Whistleblower claims are submitted by an informant on Form 211, Application for Award for Original Information. See IRM 4.71.24 Exhibit 1 at IRM 4.71 - Employee Plans Examination Exhibits for an example of Form 211.

  5. There are two types of Whistleblower Form 211 claim cases:

    1. Discretionary award IRC section 7623(a) cases ("Category A" cases), and

    2. Mandatory award IRC section 7623(b) cases ("Category B" cases).

  6. Payment of Category A awards is made at the discretion of the IRS.

  7. To be eligible for a Category B award, the amount in dispute (including tax, penalties, interest, additions to tax, and additional amounts) must exceed $2,000,000. If the taxpayer is an individual, the individual's gross income must exceed $200,000 for any taxable year at issue.

  8. This IRM section outlines the procedures for Employee Plans (EP) personnel who work Category A and Category B Whistleblower claims.

  9. IRM 25.2.2 provides general guidance for the handling of Category A and Category B Whistleblower claims. This section customizes those procedures for EP Exam.

  10. In EP Exam, the "WB Coordinator" is also the "WB Classifier" and the "EP WB Subject Matter expert (SME)" .

  11. The address of the EP WB Coordinator in EP Exam for both Category A and Category B cases is:

    IRS
    EP WB Coordinator
    1000 Liberty Avenue, Room 711
    Pittsburgh, PA 15222-4004

4.71.24.2  (08-03-2015)
Category A Whistleblower Claim Procedures

  1. When Form 211 is received by the Whistleblower Office (WB Office), the claim is added to the Whistleblower (WB) tracking system.

  2. If the WB Office determines that the case does not meet the $2,000,000 criteria to be a Category B case, the WB Office will route the case to the Informant Claims Unit (WB ICE Unit) in the Ogden Service Center for processing.

  3. If the case involves an issue under the jurisdiction of Employee Plans, the WB ICE Unit will prepare a Category A WB case file (Form 211 and any supporting information) and send it to EP Classification at the following address:

    IRS – EP Classification
    9350 Flair Drive – 4th Floor
    El Monte, CA 91731-2885

  4. When received in EP Classification, the Category A case will be logged in and forwarded to the EP WB Coordinator at:

    IRS
    EP WB Coordinator
    1000 Liberty Avenue, Room 711
    Pittsburgh, PA 15222-4004

4.71.24.2.1  (08-03-2015)
Category A Whistleblower Claim Procedures for EP Classification

  1. When the Category A WB case file is received from the WB ICE unit, EP Classification will add the case to the EP Referral database and forwarded it to the EP WB Coordinator at:

    IRS
    EP WB Coordinator
    1000 Liberty Avenue, Room 711
    Pittsburgh, PA 15222-4004

  2. EP Classification has identified a WB Classifier who will be responsible for all WB activity.

    Note:

    The name of the WB Classifier is listed on the TEGE WB Intranet site.

  3. The WB Coordinator will evaluate the claim within 90 days to determine if it should be assigned for audit.

    1. If it is determined that the case will be examined, it will be assigned to the appropriate group when additional audits are requested by that group.

    2. If the case has issues that should be examined in an expedited manner, EP Classification will expedite the assignment of the case after the classification process is completed.

  4. If the case is determined to be a "sensitive case" and warrants a higher level of analysis and oversight, the EP WB Coordinator will convene an EP Sensitive Case Committee, and the procedures in IRM 4.71.24.2.1.1 will be followed.

    Note:

    The determination of whether a case is a "sensitive case" is a facts and circumstances decision that will be made by the EP WB Coordinator.

  5. If the case is selected for examination, it will be controlled using the following codes on RCCMS/AIMS:

    1. Project code 6068 (unless the type of case falls under a special project, such as EPTA, MAP, etc.)

    2. Source code 72

    3. Condition code 015

  6. The WB Coordinator will prepare two files that will be sent to the group:

    1. The examination case file

    2. The Category A WB case file

  7. EP Classification will include special handling instructions entitled EP Exam Group Form 211 Whistleblower/Informant Category A Claim Case Instructions (Category A Instructions) in the Category A WB case file. See IRM 4.71.24 Exhibit 2 at IRM 4.71 - Employee Plans Examination Exhibits for an example of the Category A Instructions.

4.71.24.2.1.1  (08-03-2015)
Special Instructions for Category A Cases Determined to Be "Sensitive Cases"

  1. The EP WB Coordinator will review the facts to determine whether the case should be categorized as a "sensitive case."

    Note:

    The determination of whether or not a case is deemed a "sensitive case" is a facts and circumstances decision.

  2. The EP WB Coordinator's immediate supervisor must concur with his/her decision on whether a case is deemed a "sensitive case."

  3. The EP WB Coordinator must consider these situations and issues when determining if a case is a "sensitive case" :

    1. Cases involving high profile individuals (political, entertainer, etc.), companies or issues that will draw media attention

    2. Cases involving an Indian Tribal Government, or state or local government where financial wrongdoing is alleged

    3. Cases likely to attract Congressional attention

    4. Cases containing evidence or allegations of financial transactions with, including contributions to, individuals or organizations with known or suspected terrorist connections

    5. Cases where an informant or person making the referral has indicated that they intend to elevate the issue to Senior IRS Managers or Executives

    6. Cases involving other factors indicating that review by the EP Sensitive Case Committee would be desirable for reasons of fairness or integrity

  4. Cases involving a large taxpayer/employer/plan do not automatically make a case a "sensitive case."

    Example:

    Employee Plans Team Audit (EPTA) cases are not automatically deemed to be sensitive cases because of their size. The EP WB Coordinator coordinates with the EPTA Champion prior to deciding if an EPTA case is "sensitive"

  5. If the EP WB Coordinator deems a case to be a "sensitive case" and his/her supervisor concurs, the EP WB Coordinator will schedule a meeting with the EP Sensitive Case Committee within 30 days.

    Note:

    The EP WB Coordinator's immediate supervisor must concur with his/her decision on whether a case is deemed a "sensitive case."

  6. The EP WB Coordinator will send a complete copy of the Category A WB case to members of the Sensitive Case Committee.

  7. The Sensitive Case Committee will consist of:

    1. The EP WB Coordinator

    2. Three Senior EP Managers

    3. Other EP personnel deemed appropriate to evaluate and make a decision on the case.

    Note:

    The members of Sensitive Case Committee must not be in the Area or Group where the case will be worked, or the taxpayer is located, if an examination is warranted.

    Example:

    For example, if the taxpayer is located in the Gulf Coast Area, none of the members on the Sensitive Case Committee can be managers or agents of the Gulf Coast Area.

  8. The Sensitive Case Committee will make a decision about compliance activity (examine or survey), prepare a memo to document the decision, and return all WB material and documents to the EP WB Coordinator within 30 days after meeting.

  9. If the Sensitive Case Committee recommends an examination, the EP WB Coordinator will:

    1. Determine if there is any tainted information or privileged information in the file.

    2. Contact TEGE Counsel and request a "taint" review if any tainted information or privileged information is in the file.

    3. Assign the case to an EP group to be examined.

4.71.24.2.2  (08-03-2015)
Category A Whistleblower Claim Procedures for EP Agents

  1. The EP group will receive two files from EP Classification:

    1. The examination case file

    2. The Category A WB case file

  2. When you receive the Category A WB case file, carefully read the Category A Instructions in the WB case file. The Category A Instructions:

    1. Provide basic procedures and guidance for the examination.

    2. Explain the types of documents that must be in the WB case file. See IRM 4.71.24 Exhibit 2 at IRM 4.71 - Employee Plans Examination Exhibits for an example of the Category A Instructions.

  3. Follow these Category A WB case file special protection procedures:

    1. Keep the WB file in a locked cabinet.

    2. Include TD F 15-05.11 (SBU Cover Sheet) on the outside of the file.

    3. Keep all WB material, documents, interview notes, etc. separate from the examination case file.

    4. Don't mention the WB in the examination case file: Don't include any WB information in the case chronology record (CCR), exam workpapers, any audit file documents or RCCMS.

  4. Don't let the taxpayer know that there is a WB involved.

  5. If you think you should interview the WB, contact the EP WB Coordinator for assistance.

    Note:

    TEGE Counsel will also need to be involved if the WB is interviewed; this will be coordinated by the EP WB Coordinator.

  6. When you finish the examination, complete Form 11369, Confidential Evaluation Report on Claim for Award. See IRM 4.71.24 Exhibit 3 at IRM 4.71 - Employee Plans Examination Exhibits for an example of Form 11369.

    1. Complete Form 11369 for each taxpayer (except for jointly filed Forms 1040).

      Note:

      You only need to complete one Form 11369 for a jointly filed Form 1040. (Combine both spouses on a single Form 11369.)

    2. Clearly explain how the material provided by the WB affected the examination.

    3. Obtain your group manager's approval on Form 11369.

      Note:

      The WB Office heavily relies on this form when deciding the amount to award the WB. The WB Office is responsible to determine whether an award is warranted and the amount of the award. You won't be involved with this decision; however, your case write-up of the WB's information and its importance and value is critical for the award determination.

  7. Include this documentation, as appropriate and relevant in the WB case file:

    • Original WB Form 211 and attachments

    • Form 11369 for each taxpayer

      Note:

      Only one Form 11369 is required for a jointly filed Form 1040 (both spouses are combined on a single Form 11369)

    • Copies of all examined returns, including substitute for returns (SFRs) you prepared and/or secured returns the taxpayer prepared

    • Copy of the examination report and attachments

    • Special agent’s evaluation report (if applicable) attached to Form 3949

    • Copies of Activity Records

    • Copies of appropriate lead sheets and workpapers

    • Any other information which may help the WB Office in determining an award amount

  8. Close the exam case file(s) according to normal procedures.

  9. Mail the Category A WB case file to the WB ICE Unit in Ogden.

    Note:

    The address for the ICE Unit is included in the case file when you receive it.

4.71.24.3  (08-03-2015)
Category B Whistleblower Claim Procedures

  1. When the Whistleblower Office (WB Office) receives Form 211, they add the claim to the Whistleblower (WB) tracking system.

  2. If the WB Office determines that the case meets the $2,000,000 criteria to be a Category B case, they send a copy of the entire file to the EP WB Coordinator at:

    IRS
    EP WB Coordinator
    1000 Liberty Avenue, Room 711
    Pittsburgh, PA 15222-4004

4.71.24.3.1  (08-03-2015)
Category B Whistleblower Claim Procedures for the EP WB Coordinator

  1. The EP WB Coordinator coordinates all WB Category B cases for EP Examinations.

    Note:

    The name of the WB Coordinator is listed on the TEGE WB Intranet site.

    Note:

    The EP WB Coordinator also acts as the EP WB Subject Matter Expert (EP WB SME).

  2. The EP WB Coordinator will review the Category B WB claim to ensure that it is under the jurisdiction of EP.

    1. If the case is not under the jurisdiction of EP, the EP WB Coordinator will return the case to the WB Office.

    2. If the case is under the jurisdiction of EP, the WB Coordinator will establish the WB referral on the EP Classification Referral database.

  3. The EP WB Coordinator will conduct a technical analysis of the case.

  4. The EP WB Coordinator will request assistance from EP Exam personnel, EP Rulings and Agreements, EP actuaries, and EP Area Counsel as needed to evaluate the technical issues.

  5. The EP WB Coordinator will also determine whether or not the case is a "sensitive case" using the situations and issues in IRM 4.71.24.2.1.1 (2), Special Instructions for Category A Cases Determined to Be "Sensitive Case" .

  6. If the case is determined not to be a "sensitive case" , the EP WB Coordinator will immediately determine whether or not the case will be examined.

    Note:

    This decision must be reviewed and approved by the EP WB Coordinator's manager.

  7. If the case is determined to be a "sensitive case" warranting a higher level of analysis and oversight, the EP WB Coordinator will meet with the Sensitive Case Committee within 30 days and follow the procedures in IRM 4.71.24.3.1.1. The Sensitive Case Committee will make a formal decision on the case within 30 days.

    Note:

    The determination of whether a case is a "sensitive case" is a facts and circumstances decision that will be made by the EP WB Coordinator

  8. Situations and issues that the EP WB Coordinator must consider that may result in the case being deemed a "sensitive case" include:

    1. Cases involving high profile individuals (political, entertainer, etc.), companies or issues that will draw media attention

    2. Cases involving an Indian Tribal Government, or State or Local Government where financial wrongdoing is alleged

    3. Cases likely to attract Congressional attention

    4. Cases containing evidence or allegations of financial transactions with, including contributions to, individuals or organizations with known or suspected terrorist connections

    5. Cases where an informant or person making the referral has indicated that they intend to elevate the issue to Senior IRS Managers or Executives

    6. Cases involving other factors indicating that review by the EP Sensitive Case Committee would be desirable for reasons of fairness or integrity

  9. Cases involving a large taxpayer/employer/plan do not automatically make a case a "sensitive case."

    1. For example, Employee Plans Team Audit (EPTA) cases are not automatically deemed to be sensitive cases because of their size.

    2. The EP WB Coordinator will coordinate with the EPTA Champion prior to making a decision on an EPTA case.

  10. If it is determined that an audit is not warranted, the EP WB Coordinator will prepare Form 11369 and send the entire WB file back to the WB Office.

    Note:

    The Form 11369 requires the approval/signature of the EP WB Coordinator’s manager.

    Note:

    If the case is a "sensitive case" , written approval must also be secured from the Sensitive Case Committee to not examine the case.

  11. If the case is selected for examination, the EP WB Coordinator will contact TEGE Counsel and request assistance in conducting a "taint" review and debriefing/interview of the WB.

  12. When a Counsel attorney is assigned, the EP WB Coordinator will send an entire copy of the WB case file to the designated Counsel attorney.

  13. The EP WB Coordinator will consult with Counsel to determine whether a debriefing/interview of the WB is warranted.

  14. If a debriefing of the WB is warranted, the EP WB Coordinator will contact the WB and arrange a conference call involving the WB, the EP WB Coordinator and the Counsel attorney.

    Note:

    The purpose of the call with the WB is to clarify the information provided by the WB, determine if the WB has other information of value, and to help determine what, if any, of the information is tainted.

  15. At the conclusion of the call with the WB, the EP WB Coordinator will complete the Debriefing Checksheet. See IRM 4.71.24 Exhibit 4 at IRM 4.71 - Employee Plans Examination Exhibits for an example of the Debriefing Checksheet.

  16. When TEGE Counsel completes the "taint" review, the attorney will prepare a "taint" review and risk assessment memo and send it to the EP WB Coordinator.

  17. The EP WB Coordinator will take into consideration the "taint" review and risk assessment memo and all other gathered information, and will prepare the Summary of EP Taint Review. See IRM 4.71.24 Exhibit 5 at IRM 4.71 - Employee Plans Examination Exhibits for an example of the Summary of EP Taint Review.

  18. If the EP WB Coordinator determines that an examination is warranted, the EP WB Coordinator will:

    1. Ensure that any tainted information is removed from the file before the case is assigned for examination.

      Note:

      The Coordinator will return all tainted information to the WB Office.

    2. Contact the appropriate EP Area Manager to determine which group should be assigned the case.

    3. Have EP Classification establish the appropriate returns on AIMS/RCCMS.

    4. Send the entire WB case file to the applicable group manager.

      Note:

      The EP WB Coordinator will include special handling instructions entitled EP Exam Group Form 211 Whistleblower/Informant Category B Claim Case Instructions (Category B instructions) in the Category B WB case file. See IRM 4.71.24 Exhibit 6 at IRM 4.71 - Employee Plans Examination Exhibits for an example of the Category B Instructions.

  19. If the case is selected for examination, it will be controlled using the following codes on RCCMS/AIMS:

    1. Project code 6068 (unless the type of case falls under a special project, such as EPTA, MAP, etc.)

    2. Source code 72

    3. Condition code 016

  20. The EP WB Coordinator has 90 days from the date the case is received from the WB Office to evaluate the case, conduct the debriefing and "taint" review, coordinate with TEGE Counsel, and make the recommendation regarding examination. See the Field Directive from the Deputy Commissioner for Services and Enforcement, dated June 20, 2012, which can be found on Whistleblower Office Intranet page

4.71.24.3.1.1  (08-03-2015)
Special Instructions for Category B Cases Determined to Be "Sensitive Cases"

  1. If the EP WB Coordinator determines the case to be a "sensitive case" warranting a higher level of analysis and oversight, the EP WB Coordinator will schedule a meeting with the Sensitive Case Committee.

    Note:

    The determination of whether a case is a "sensitive case" is a facts and circumstances decision that will be made by the EP WB Coordinator.

  2. The Sensitive Case Committee will consist of:

    1. The EP WB Coordinator

    2. Three Senior EP Managers

    3. Other employees deemed appropriate to evaluate and make a decision on the case

      Note:

      The members of Sensitive Case Committee must not be in the Area or Group where the case will be worked, if an examination is warranted.

  3. The EP WB Coordinator will send a complete copy of the WB case file to each member of the Sensitive Case Committee.

  4. The Sensitive Case Committee will make a decision about compliance activity (examine or survey) and will prepare a memo to document the decision and return all WB material and documents to the EP WB Coordinator.

  5. If the Sensitive Case Committee recommends an examination, the procedures listed in IRM 4.71.24.3.1 (10) through IRM 4.71.24.3.1 (18) will be followed.

  6. If the Sensitive Case Committee determines that an examination is not warranted,

    1. The Committee will provide written instruction to the EP WB Coordinator to not examine the case

    2. The EP WB Coordinator will prepare Form 11369 and send the entire WB file back to the WB Office.

4.71.24.3.2  (08-03-2015)
Category B Whistleblower Claim Procedures for EP Agents

  1. The EP group will receive two files from the EP WB Coordinator:

    1. The examination case file

    2. The Category B WB case file

  2. When you receive the Category B WB case file, carefully read the Category B Instructions in the WB case file. The Category B Instructions:

    1. Provide basic procedures and guidance for the examination.

    2. Explain the types of documents that must be in the WB case file. See IRM 4.71.24 Exhibit 6 at IRM 4.71 - Employee Plans Examination Exhibits for an example of the Category B Instructions.

  3. Follow these Category B WB case file special protection procedures:

    1. Keep the WB file in a locked cabinet.

    2. Include TD F 15-05.11 (SBU Cover Sheet) on the outside of the file.

    3. Keep all WB material, documents, interview notes, etc. separate from the examination case file.

    4. Don't mention the WB in the examination case file: Don't include any WB information in the case chronology record (CCR), exam workpapers, any audit file documents or RCCMS.

  4. Don't let the taxpayer know that there is a WB involved.

  5. If you think that an interview of the WB is warranted, contact the EP WB Coordinator for assistance.

    Note:

    TEGE Counsel will also need to be involved if the WB is interviewed; this will be coordinated by the EP WB Coordinator.

  6. At the conclusion of the examination, complete Form 11369. See IRM 4.71.24 3 at IRM 4.71 - Employee Plans Examinations for an example of Form 11369.

    1. Complete Form 11369 for each taxpayer (with the exception of Forms 1040 that are jointly filed returns).

      Note:

      Only one Form 11369 is required for a jointly filed Form 1040 (both spouses are combined on a single Form 11369)

    2. Clearly explain how the material provided by the WB affected the examination.

    3. Get approval of Form 11369 from your group manager.

      Note:

      The WB Office heavily relies on this form when deciding the amount to award the WB. The WB Office is responsible to determine whether an award is warranted and the amount of the award. You won't be involved with this decision; however, your case write-up of the WB's information and its importance and value is critical for the award determination.

  7. At the conclusion of the examination, mail the Category B WB case file in a confidential envelope to the EP WB Coordinator at:

    IRS
    EP WB Coordinator
    1000 Liberty Avenue, Room 711
    Pittsburgh, PA 15222-4004

  8. When mailed, the WB case file should contain the following documentation, as appropriate and relevant:

    • Original WB Form 211 and attachments

    • Form 11369 for each taxpayer

      Note:

      Only one Form 11369 is required for a jointly filed Form 1040 (both spouses are combined on a single Form 11369)

    • Copies of all examined returns, including substitute for returns (SFRs) prepared during the examination and/or secured returns prepared by the taxpayer

    • Copy of the examination report and attachments

    • Special agent’s evaluation report (if applicable) attached to Form 3949

    • Copies of Activity Records

    • Copies of appropriate lead sheets and workpapers

    • Any other information which may assist the WB Office in determining an award amount.

  9. The EP WB Coordinator will review the WB case file for completeness and then send the entire file to the WB Office.

  10. Close the examination case to EP Mandatory Review with Form 3198-A attached to the outside of the case file.

    Note:

    Other than the notation on Form 3198-A that the exam involves a Category B Whistleblower case, there should be no mention of the WB in the examination case file. Neither the case chronology record (CCR), exam workpapers nor any documents in the examination case file nor RCCMS should contain any information about the WB.

    Note:

    Do not issue the closing letter. Mandatory Review will issue the closing letter after their review is complete.

4.71.24.4  (08-03-2015)
Survey or Transfer

  1. If the decision is made to survey a Category A case at the group level:

    1. The agent will complete items 1 through 8 and 14 of Form 11369 and mail the form with the Category A WB case file to the WB ICE Unit in Ogden.

    2. The exam case file will be closed using the Survey procedures contained in IRM 4.71.7.

  2. If the manager/agent decide to survey a Category B case:

    1. The group manager must get the Area Manager's written approval and contact the EP WB Coordinator to discuss the reason the case is being surveyed.

      Note:

      If the case is a "sensitive case" , the EP WB Coordinator will secure the Sensitive Case Committee's written approval to not audit the case.

    2. Once approved for survey, the agent will complete items 1 through 8 and 14 of Form 11369 and mail the form with the Category B WB case file to the EP WB Coordinator and close the exam case file using the Survey procedures in IRM 4.71.7.

  3. If the case is transferred to another group, the agent will complete items 1 through 8 and 15 of Form 11369 and mail the form to the EP WB Coordinator.

  4. The address of the EP WB Coordinator is:

    IRS
    EP WB Coordinator
    1000 Liberty Avenue, Room 711
    Pittsburgh, PA 15222-4004


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