January 8, 2018

IRS Whistleblower Office Releases FY 2017 Annual Report

By the C|C Whistleblower Lawyer Team

The IRS recently released its FY 2017 annual report detailing the work of the IRS’ whistleblower office. In 2017, the IRS whistleblower office made 242 awards totaling $33.9 million. This adds on to FY 2016’s total to make 660 awards in the past two years. The 660 awards over the past two years are greater than the 655 awards paid over the previous six years from FY 2010 to 2015. The IRS whistleblower office has now approved more than $499 million in whistleblower awards since 2007.

The IRS also reported a 50% increase in awards under IRC § 7623(b), which deals with underpayments of tax or general violations of the internal revenue laws. However, in comparison to FY 2016, total awards and amounts collected were down in FY 2017 by 42% and 48% respectively. Staffing at the IRS whistleblower office remained consistent with FY 2016 with 38 staff in FY 2017 compared to 37 in FY 2016.

There were not significant changes to the IRS whistleblower law over the previous year and the law still does not contain protections for whistleblowers against retaliation. Provisions to protect tax whistleblowers were originally included in the Republican tax bill but were ultimately eliminated from the final bill before passage at the end of last year. It remains to be seen whether any protections for whistleblowers will be included in subsequent legislation or regulations related to the tax bill.

In terms of specific statistics, the IRS whistleblower office had 367 claims related to awards with 242 total awards equaling an approximately 66% conversion rate. The office had 27 IRC § 7623(b) awards and 19 collections of over $2 million. Overall the IRS collected $190,583,750 with approximately $33.9 million awarded to whistleblowers. This total a 17.8% award as a percentage of amounts collected. March, April, and July were the most active months for total claim numbers issued. Overall, the report shows continuing success at the IRS whistleblower office, but the changes to the tax code overall as a result of the recent tax bill could result in less claims by whistleblowers in the coming year.

 

 

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