The Internal Revenue Service has released its annual whistleblower report to Congress which is entitled “Fiscal Year 2012 Report to the Congress on the Use of Section 7623.” Section 7623 of the Internal Revenue Code requires the IRS to pay monetary rewards to whistleblowers if information which is provided substantially contributes to the collection of tax, penalties, and interest when the amounts in dispute are more than $2 million. The IRS has established a Whistleblower Office to administer those awards (more details available on the IRS website here). In the report to Congress, the IRS states that during fiscal year 2012, the IRS received 332 whistleblower submissions identifying 671 taxpayers. Awards are not paid to whistleblowers until the taxpayer in question has exhausted all appeal rights and the statutory period for refund claims has expired or been waived; as a result, whistleblower awards are often not paid for several years after the whisleblower claim has been filed. The report notes that most of the claims paid in FY 2012 were based upon claims filed prior to 2006. During FY 2012, the IRS paid out over $125 million in awards, based upon collection of $592 million in taxes, penalties, and interest. The FY 2012 awards are by far the largest amounts paid by the IRS since the whistleblower law was amended in 2006 (in contrast, only $8 million was paid out during FY 2011), and the bulk of the funds ($104 million) paid in FY 2012 went to Bradley Birkenfeld, the former UBS banker who blew the whistle on the Swiss bank.