In the 10th year since the creation of Internal Revenue Code section 7623(b), the Internal Revenue Service (IRS) Whistleblower Program issued 418 awards totaling more than $61 million (before sequestration), according to the annual report issued by the program’s Whistleblower Office to Congress. The total number of awards represented a 322 percent increase over fiscal year 2015. The monetary disbursement, however, was down from the more than $100 million paid out last year.
One of the most promising aspects of the report was the identification of 18 awards under Section 7623(b) and the collection of penalties over $2 million in 16 cases. Section 7623(b) was created by the Tax Relief and Health Care Act of 2006 to require awards for eligible whistleblowers after the IRS recovers funds in a case where there is more than $2 million dollars in dispute.
For several years, experts raised concerns that the program was backlogged and the Government was leaving potential tax dollars on the table by failing to efficiently process and investigate whistleblower claims. With a few more years like this one, those concerns will be a distant memory. The annual report details the efforts of the to clear the logjam of information that built up in 2015.
In its effort to reach this achievement, the IRS implemented nine of the ten recommendations from a U.S. Government Accountability Office (GAO) audit of the program. It is also reviewing suggestions from the U.S. Treasury Inspector General for Tax Administration to improve the program.
Fiscal Year 2016 was the first full year for the IRS Whistleblower Office under the direction of its new director, Lee Martin. Martin succeeded its longstanding director, Stephen Whitlock, who moved to the position of Director of the Office of Professional Responsibility at the IRS
In the annual report, Martin also urged the adoption of anti-retaliation protections to provide compensation to whistleblowers who put their careers at risk by disclosing taxpayer information to the U.S. Government. We fully support the adoption of additional protections like this one to support tax whistleblowers.
The annual report provides a number of statistics concerning the IRS program. For additional information, please contact one of our IRS whistleblower attorneys for assistance or a free consultation concerning a potential whistleblower tip.