IRS On Verge Of Crippling Whistleblower Program
Whistleblower Advocates Submit Extensive Comment
in Response to Proposed IRS Regulations
Washington, D.C. February 20, 2013. Yesterday, the National Whistleblower Center ("NWC"), the National
Whistleblowers Legal Defense and Education Fund ("Fund"), Bradley
Birkenfeld, Scott Rosen, and Gene Ross jointly submitted a comprehensive
84-page comment on the IRS's proposed rules for its whistleblower
office (26 CFR Part 301 [Reg-141066-09]). Click here to view their comment.
The critical issues addressed in the joint submission include:
IRS rules that would severely restrict the scope of the IRS
whistleblower program by limiting "collected proceeds" to violations of
Title 26 only. The joint comment states that the statute was intended to
cover all violations enforced by the IRS, even if they are in Title 31
or Title 18. A strong whistleblower program is needed to prevent tax
fraud related to offshore banking.
- The proposed IRS rules seek to define "related action" in an
unreasonably and arbitrarily narrow manner. The NWC's position is that
whistleblowers that provide information about a type of tax shelter or
other complex transaction that the IRS would not have proceeded on
otherwise, should receive an award for all proceeds collected as a
result of that information.
- The joint submission further states that the IRS needs to set
reasonable deadlines for administrative action, both to encourage
whistleblowing and to increase accountability. The IRS should promulgate
regulations adopting and expanding on the guidelines in Commissioner
Miller's June 20, 2012 Memorandum.
Dean Zerbe, the NWC's Senior Policy Analyst who also represents
tax whistleblowers such as Bradley Birkenfeld, released the following
statement in regard to the proposed rules:
"I appreciate the time and energy that the IRS put into these
proposed regulations. However, the proposed regulations are the
beginning not the end. My hope is that the IRS will listen closely to
the whistleblower community and that we can at the end of the day have
final regulations that are based on the plain language of the statute
and meet the policy goals of Congress of encouraging whistleblowers to
come forward by providing them awards based on the information they
provide. It is the honest taxpayers of this country that will benefit
from having a successful whistleblower program in place that helps the
IRS address those engaged in tax evasion."
Stephen Kohn, Executive Director of the NWC and who also represents
Birkenfeld and other tax whistleblowers stated, "The future of the IRS
Whistleblower program is on the line. The final rules will either
encourage employees to risk their careers to do the right thing, or they
will create a straight jacket over the law thus thwarting its
The National Whistleblowers Center encourages U.S. Tax-payers to submit comments on the proposed rules. Click here to learn how.