Final Whistleblower "Collected Proceeds" Regulations Issued
Today the Treasury Department issued the finalized Treas. Reg. Section 301.7623-1(a) and (g) relating to the definition of “collected proceeds” for purposes of section 7623 tax whistleblower awards. Although the language of the final whistleblower regulation was unchanged from the proposed regulation, the supplementary information to the final regulation reveals that the Treasury Department shares our view that section 7623's definition of "collected proceeds” should be read broadly. Treasury affirmatively responded to our hearing testimony with respect to the question of whether restitution payments are award eligible and whether the reduction of a tax attribute in one year can result in an award from proceeds collected in another year. The unchanged final regulation confirmed that awards can be paid on information that that leads to the “denial of a claim for refund that otherwise would have been paid” - which is a huge victory for whistleblowers because the IRS initially sought to make these amounts ineligible for awards.