IRS Attempts to Restrict Whistleblower Program

The National Whistleblowers Center is urging citizens to voice their opposition to the Internal Revenue Service (IRS) regarding new proposals that would “severely restrict the scope of the IRS Whistleblower Program,” which has been proven successful since Congress created the program in 2006. The program was designed to encourage citizens to disclose tax fraud. Citizens who report fraud against the government are known as “whistleblowers.”

When the program was initiated, the IRS joined the Department of Justice and the Securities and Exchange Commission in paying whistleblowers a percentage of the monies collected when they provide helpful information resulting in the government recouping lost revenue.

In the past several years, with the help of whistleblowers, the IRS has collected hundreds of millions of dollars that would otherwise have gone uncollected. Why does the IRS want to hamper a program that has returned vast sums of tax revenue back to the government? It may be the result of some negative feedback due to a recent case where a convicted perjurer was paid many millions of dollars for providing information to the government. That whistleblower provided information that resulted in the Swiss bank secrecy laws being completely revamped and hundreds of U.S. citizens paying their share of taxes on those Swiss accounts. Whistleblowers are paid only a percentage of what the government recovers in situations where the government had not discovered the unpaid taxes.

The proposed IRS restrictions to the whistleblower program would either greatly reduce or eliminate a whistleblower’s reward for exposing fraud. Without this incentive, there is no reason for whistleblowers to risk their job and reputation to report fraud. By cutting off the source of information, the IRS will likely collect far less in unpaid tax revenues. Even when an altruistic (and unpaid) whistleblower reports tax fraud, the IRS has requested changes to the program so that they can place those whistleblower reports on the back burner or not investigate the reports at all. If these changes are implemented, the IRS could ignore leads, decline to consider evidence of fraud, and drag the process on for years.

All of these restrictions would discourage whistleblowers from coming forward. Without the incentives and speedy process of investigating whistleblower information, the IRS will lose the very elements that have made the IRS Whistleblower Program enormously successful. If whistleblowers are discouraged from coming forward to expose fraud, WE, the American people, will pay more taxes to make up for the lost revenue. Instead of considering tax hikes, additional fees, and disguised tax increases, the government must collect those taxes that are owed by tax evaders and avoiders. This is not the time to cut back on a program that pays for itself and actually makes money for the government by collecting unpaid taxes.

Please join whistleblower advocate Senator Chuck Grassley (R – IA) and your fellow citizens by commenting on the proposed IRS regulations. Let them know that we need to continue the IRS whistleblower program and rewards without adding any restrictions on the program.


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