The Internal Revenue Service’s Whistleblower Office ramped up the number of monetary awards it gave to tax tipsters last year, according to a new report.
In fiscal year 2016, the Whistleblower Office made 418 awards to whistleblowers, a total of more than $61 million, representing a 322 percent increase compared to the 99 total awards paid in FY 2015. In addition, whistleblower claims assigned in FY 2016 were up 6.4 percent from those submitted in FY 2015, while closures of whistleblower cases increased 99 percent, according to the Whistleblower Office’s 2016 Annual Report to Congress.
However, even though the number of awards increased sharply, the total amount in dollar terms declined from the previous year, from $103 million in fiscal year 2015 to $61 million in FY 2016. Still, that represented an improvement over the $52 million awarded in FY 2014.
This is the tenth year since Congress passed legislation formally created the office that oversees the whistleblower program. “Whistleblowers have helped the IRS detect and deter tax noncompliance and avoidance, helping to protect both the nation’s revenue collection and the integrity of our voluntary compliance tax system,” wrote IRS Whistleblower Office director Lee D. Martin in the report. “Indeed, since 2007, information submitted by whistleblowers has assisted the IRS in collecting $3.4 billion in revenue, and, in turn, the IRS has approved more than $465 million in monetary awards to whistleblowers.”
He noted that his office has succeeded in all but eliminating a backlog of whistleblower claims over the past year, in response to recommendations from the Government Accountability Office and the Treasury Inspector General for Tax Administration. The office has also put in place a more streamlined process to avoid future backlogs.
“The whistleblower office is more welcoming to whistleblowers all the time, and the American public benefits as a result,” said Sen. Chuck Grassley, R-Iowa, in a statement Thursday. Grassley wrote the provisions in a 2006 law improving the incentives for whistleblowers to come forward and report large-dollar tax fraud. “Whistleblowers have helped the IRS recover $3.4 billion that otherwise would have been lost to fraud,” he noted. “Cracking down on big-dollar tax fraud is a matter of fairness to the vast majority of taxpayers who pay what they owe. Still, the IRS and Congress can’t rest on our laurels. The IRS still is not as fast it could be in considering whistleblower information. Whistleblowers often have put their livelihoods on the line to come forward, and they deserve timely answers from the IRS. Another challenge is making sure the IRS interprets the whistleblower statute in a favorable light toward whistleblowers, which it doesn’t always do. I look forward to working with the new administration on whistleblower concerns. As I mentioned to Treasury secretary nominee Steven Mnuchin during our meeting, it’s required a lot of oversight to maintain the momentum at the IRS whistleblower office, and I’d like to see a Treasury secretary who will build on the progress.”
Michael Cohn, editor-in-chief of AccountingToday.com, has been covering business and technology for a variety of publications since 1985.