Blog · 14 October 2026

IRS Whistleblower Program and HMRC’s Strengthened Reward Scheme: What US CPA Firms and UK Accountants Should Know

By Keshav Bansal, CA

The IRS whistleblower program now has a formal partner across the Atlantic. On October 7, 2026, the IRS highlighted its partnership with HMRC’s Strengthened Reward Scheme, the UK’s new informant reward programme, in news release IR-2026-120. For US CPA firms and UK accountants with cross-border clients, that matters for two reasons: clients with undisclosed offshore positions now face informants who can be paid on either side, and the people the IRS names as typical whistleblowers are accountants, bankers and executives.

What IR-2026-120 says

Per IR-2026-120 (October 7, 2026), HMRC’s Strengthened Reward Scheme launched in November 2025 to encourage reporting of serious tax avoidance and evasion involving the wealthiest individuals and largest businesses, and it drew on the IRS Whistleblower Office’s expertise to get established. IRS Chief Executive Officer Frank J. Bisignano said the collaboration “will help deter large-scale, cross-border tax evasion.” HMRC Chief Executive JP Marks said the IRS “has played an important role in supporting the development” of the scheme.

The release lists examples of what whistleblowers in either country can report:

• Undeclared foreign bank accounts and failure to file a Report of Foreign Bank and Financial Accounts (FBAR).
• Hidden assets routed through foreign trusts, foundation structures, financial instruments or anonymous holding entities in tax havens.
• Money laundering.
• Transfer pricing manipulation and illicit cross-border profit shifting by high-net-worth individuals and multinational entities.

It also states that whistleblowers do not need to be citizens or residents of the US or UK to receive an award, and that an award depends on the information leading to the collection of taxes or other proceeds.

How the IRS Whistleblower Program works

The US program sits in Internal Revenue Code §7623. The main points CPA firms get asked about:

• Award range. Awards are generally 15% to 30% of the proceeds collected that are attributable to the information.
• The §7623(b) track. The mandatory-award track applies to larger cases, where the amount in dispute exceeds $2 million.
• Form 211. A formal award claim starts with Form 211. A simple tip through IRS.gov/SubmitATip is not the same thing as an award claim.
• Protection and tax. The law includes anti-retaliation protection for whistleblowers, and awards are taxable income.

No collected proceeds, no award: Scott v. Commissioner

A recent Tax Court case shows how literally “collected proceeds” is read. In Scott v. Commissioner, T.C. Memo. 2026-104 (October 1, 2026; Judge Guider; reported by Bloomberg Tax on October 5), a former IRS tax-exempt bond specialist tipped that a nonprofit correctional corporation’s 2006 municipal bonds were misclassified. The IRS examined, bondholders converted 100% of the outstanding principal into taxable 2017 bonds, and the exam closed with a no-change letter. Because no tax, penalty or interest was collected, the Whistleblower Office denied the award and the Tax Court granted the IRS summary judgment.

The practical point for anyone advising a would-be whistleblower: a tip that changes behaviour but collects nothing pays nothing.

How HMRC’s Strengthened Reward Scheme works

Per HMRC’s Reporting serious tax avoidance or evasion guidance on GOV.UK, an informant could get a reward if the information leads to the collection of at least £1.5 million in tax, and could get between 15% and 30% of the tax collected, excluding penalties and interest. Anonymous reports are accepted, but contact details are required to be eligible for a reward.

HMRC lists several exclusions. Among them: current or former civil servants who obtained the information in their job, the taxpayer involved or the person who planned the arrangement, information HMRC already knows or could find through routine processes, people acting on behalf of someone else, and people who are required by law to disclose, or not disclose, the information.

On tax, HMRC’s policy paper on withholding for the scheme says rewards are taxable income of the informant, and that a new section 974A of the Income Tax Act 2007 will require HMRC to deduct Income Tax at the additional rate of 45% before paying a reward. Any further tax or repayment is then reconciled like any other payment with tax withheld.

What this means for US CPA firms

• Revisit clients with foreign accounts. FBAR failures top the IRS list. Clients with UK or other foreign accounts, trusts or holding entities that have never been reported should hear that the risk of a third party reporting them has gone up, and that voluntary routes such as the IRS Streamlined Filing Compliance Procedures or Delinquent FBAR Submission Procedures may fit their facts. Check the current IRS terms for each before advising.
• Know your own duty when you find noncompliance. Under Circular 230 §10.21, a practitioner who learns a client has not complied with the tax laws must advise the client of the noncompliance and its consequences.
• Treat client data as something an insider could share. The IRS names accountants as typical sources. Clear engagement letters, access controls and a written security plan protect the firm and the client.
• Prepare for client questions about awards. Clients who ask about becoming a whistleblower should hear the basics (Form 211, the collected-proceeds rule, taxable awards) and be pointed to a lawyer who handles these claims.

What this means for UK accountants

• Your reporting duties come first. UK accountancy firms already have anti-money-laundering reporting obligations. HMRC’s exclusion for people required by law to disclose the information means a practice’s own staff generally should not expect a reward for what they must report anyway.
• Raise disclosure with exposed clients. Clients with US-linked accounts or structures, or UK clients with undeclared offshore income, may want to consider HMRC’s disclosure routes, such as the Worldwide Disclosure Facility, before an informant reaches HMRC first. Check current HMRC guidance for terms.
• Watch dual-status clients. US citizens living in the UK generally file in both countries, and a whistleblower can now be rewarded by either authority.

What else is moving

The Taxpayer Assistance and Service (TAS) Act, which the Senate passed unanimously on September 30, 2026, includes whistleblower reforms among its 65 bipartisan IRS changes. It passed as a substitute amendment to House-passed H.R. 5349, so it goes back to the House. Watch for final text before advising clients on any change.

Where this fits

Most IRS contact is still by letter rather than by informant; our post on IRS audit rates and CP2000 notices covers what the numbers show. For the preparer-responsibility side, see ghost preparers and preparer responsibility, and for consent and data handling when work crosses borders, our Section 7216 consent checklist.

If cross-border clean-up work, FBAR catch-up filings or UK Self Assessment volume is stretching your team, outsourced tax prep and bookkeeping support for US CPA firms and UK practices can take on document gathering and draft work while your signing professionals keep the judgment calls. Email info@taxbrewglobal.com.

Check current guidance: this article summarizes sources as of 14 October 2026 (IRS IR-2026-120, October 7, 2026; HMRC guidance on GOV.UK on reporting serious tax avoidance or evasion and on withholding tax for Strengthened Reward Scheme rewards; Scott v. Commissioner, T.C. Memo. 2026-104, via Bloomberg Tax, October 5, 2026; Senate Finance Committee on the TAS Act, September 30, 2026). It is general information, not tax or legal advice. Confirm every figure with the IRS and HMRC before acting.