The IRS pays informants. Under Section 7623, whistleblowers can collect fifteen to thirty percent of what the government recovers — which means ex-business partners, former spouses, disgruntled employees, and competitors all have a financial incentive to report you. If your exam seems to know things only an insider could know, there's a decent chance an insider told them.
What a Whistleblower-Driven Case Looks Like
You'll never be told a claim was filed; the program is confidential by design. What you'll see instead is an examination that arrives unusually well-armed — specific transactions questioned, specific accounts named, document requests that read like someone handed the agent a map. Because someone did.
That changes the defense. The informant's information may be incomplete, outdated, stripped of context, or flat wrong — submitted by a person with an axe to grind and a payday in mind. Part of the work is reconstructing what the government likely has, correcting the record where the insider's story breaks down, and being acutely aware that whistleblower-sourced exams carry elevated fraud-referral risk. These are eggshell audits by default, and every statement you make goes into a file someone else helped write.
The Discipline That Wins
No volunteered interviews. No narrative-building with the Revenue Agent. Every document produced deliberately, every issue answered on paper where the words can be chosen with care. And the full conversation about what really happened occurs exactly once — with an attorney, under privilege, where the facts can be handled honestly without becoming evidence.
Someone decided to make your tax life their business opportunity. The response isn't panic. It's structure.