NWC Releases Letter to IRS on Whistleblower Program

Published on September 06, 2012

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NWC Releases Letter to IRS on Whistleblower Program

Washington, D.C. September 6, 2012 – Today, the National Whistleblower Center released a letter to Internal Revenue Service (IRS) Commissioner Douglas Shulman concerning changes necessary to make the whistleblower program effective. The NWC letter addresses a key part of the IRS whistleblower statute that potentially limits the award provided to a whistleblower who has “planned and initiated” the action that led to the underpayment of tax for which the whistleblower seeks an award. The current Internal Revenue Manual defines “planned and initiated” in a manner that is at odds with the statute, undermines Congressional policy and actively discourages knowledgeable and informed whistleblowers from coming forward. The letter explains that “planned and initiated” should only exclude those individuals who are the chief architect or chief wrongdoer from receiving an award.

Dean Zerbe, Senior Policy Analyst for the National Whistleblower Center, issued the following statement:

It is vital for the success of the IRS whistleblower program that it encourages insiders with detailed information to come forward.  Making sure that the limitation on awards for whistleblowers who “planned and initiated” is understood to apply narrowly only to those individuals who are the chief architect or chief wrongdoer – as intended by Congress – is key to the IRS getting information about the next tax shelter and the next illegal offshore account.  We hope today’s submission by the National Whistleblower Center will help the IRS realize the policy goals of encouraging knowledgeable insiders to come forward and blow the whistle on tax fraud.

Mr. Zerbe was tax counsel for the Senate Finance Committee (2001-2008) and was responsible for the creation of the IRS whistleblower law under the direction of Chairman Charles Grassley.

Forbes article by Dean Zerbe “IRS Whistleblower Program Turns the Corner” (September 5, 2012)

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