WASHINGTON, D.C. | June 10, 2022 — Today, the IRS released. its annual report on the IRS whistleblower program. The numbers of dollars collected thanks to the program falling to $245 million dollars – down from $1.44 billion dollars just three years ago in 2018. Awards to whistleblowers have dropped to $34.5 million – almost a tenth of where the program was in 2018.
“There is no way to make these outrageous numbers look good. It is extremely dispiriting to see these results,” said Dean Zerbe partner at Zerbe, Miller, Fingeret, Frank & Jadav who represents tax whistleblowers. “The IRS and Treasury management need to take a hard look and recognize that the best program the IRS has for going after big-time tax cheats is in a ditch. There are many commonsense reforms that the IRS can quickly embrace to start getting the program back on the road – allowing for awards under the discretionary program for whistleblowers who don’t meet the criteria of the mandatory award program; enter into contracts with whistleblowers and their advisors so that the IRS can fully utilize the knowledge and expertise of whistleblowers and their advisors; and, expediting the backlog of good cases that have been waiting for action by IRS Counsel and others – are just a few,” Zerbe said.
Siri Nelson, Executive Director of NWC stated: “These results from the IRS whistleblower program are extremely disappointing. The low numbers are especially troubling when other whistleblower award programs have had banner years – the CFTC and SEC award programs as well as the False Claims Act. The only people celebrating these low numbers for the IRS whistleblower program are the millionaire and billionaire tax cheats. The IRS whistleblower program was key to breaking open secret Swiss banking and other tax evasion. The American taxpayer is right to be concerned that the IRS make full use of the whistleblower program – which has a proven track record of successfully going after tax cheats. The Treasury has talked a great deal about going after tax evaders – but the results in today’s annual report are deeply troubling.”
Stephen Kohn of Kohn Kohn and Colapinto, LLP stated, “The IRS whistleblower report should be a massive wakeup call to the Congress that it needs to take action now and pass the bipartisan and bicameral reform legislation – the IRS Whistleblower Program Improvement Act. Passage of this legislation will send a strong signal of support for the program to the IRS and to whistleblowers. It isn’t a coincidence that the number of awards has gone down and down since the Tax Court changed the standard of review for tax whistleblower decisions to a rubber stamp. Whistleblowers need to have confidence – and IRS managers need to know — that whistleblowers will get a full independent review of any denial of a whistleblower award.”
In April, NWC along with KKC and ZMF, filed an amicus brief addressing the issue of judicial review in Lissack v. Commisisoners.
Zerbe commented, “The recent appointment of a new director of the Whistleblower Office, John Hinman, comes at a good time. Mr. Hinman brings years of experience as an IRS employee in examination and audit – most recently in transfer pricing. The hope is that as an IRS insider, Mr. Hinman can advance the ball on a key challenge for the IRS whistleblower program – having the program embraced by examiners and auditors in the field. Mr. Hinman will benefit from the experienced and dedicated professional staff of the IRS whistleblower office.
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NWC Executive Director Siri Nelson is available for comment. For more information, contact NWC at firstname.lastname@example.org.