Walmart Whistleblower Sees Openings to Invest in Claims Like His

Charles Middleton may know the perils and potential payoffs of the IRS’s secretive whistleblower program as well as anyone.

For 10 years, he has grappled with the program over claims against two former employers, Walmart Inc. and billionaire Bill Koch’s Oxbow Carbon LLC. That has given unique insight that the former senior tax executive hopes will jump-start his next venture: an investment fund bankrolling claims like his.

The idea isn’t a new one. Some litigation finance and investment firms, such as Burford Capital Ltd., have been investing in a small number of IRS claims for years. Middleton ...