July 10, 2015

IRS Releases Another Report on Whistleblower Program

shutterstock_221356042By Jason Enzler

The Internal Revenue Service just released its annual report to Congress regarding its whistleblower program – and it reveals a program that at first blush is just as disappointing as it was last year.  In fact, a comparison of the two years suggests that the IRS whistleblower program may even have become less effective than it was previously.

For example, in FY 2013, the IRS received over 9,000 whistleblower submissions, but paid out only $53 million.  This past year, the IRS received even more tips – over 14,000.  But the amount of awards payed out to whistleblowers sunk to less than $50 million.  And the pace of dealing with whistleblower submissions remains glacial slow, taking “five to seven years” for the average whistleblower to be rewarded.

A peak behind the numbers, however, offers a glimmer of hope.  The number of awards has been growing each year.   And the gigantic increase in the number of whistleblower submissions does not necessitate that the IRS pay out more money in order to be successful.  Indeed, as the number of submissions has increased, so too has the number of “junk” submissions, or submissions that have nothing to do with tax law (last year alone there were over 1,500 of these).

Finally, there is the fact that last year the IRS issued rules to clarify its program and offer guidance to whistleblowers.   According to the IRS, the number of whistleblower rewards is expected to increase next year.  That would be a welcome development, and one that should be easily within reach if the agency makes good on its goal of “expanding the program’s reach and improving communications with existing and potential whistleblowers.”

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