This article was sent as part of NWC’s “Sunday Read” series which aims to educate supporters about whistleblower stories, legislative or policy initiatives and current events. For more information like this, please join our mailing list.

Major reforms to the IRS Whistleblower Program are urgently needed to restore its effectiveness and credibility. As noted in April, the IRS Whistleblower Office debuted its first multi-year operating plan, which marked a positive step for whistleblower advocacy. New developments, such as the nomination of Donald Korb as IRS Chief Counsel, also provide a pivotal opportunity to drive these changes forward. Korb served as IRS Chief Counsel under U.S. President George W. Bush from 2004 to 2008, and a confirmation would mark his second term in the role.

The National Whistleblower Center (NWC), along with bipartisan Senate leaders, has long championed reforms to address debilitating delays, arbitrary caps, and inconsistent administration of whistleblower awards. Stopping this practice, known as “Repeal by Delay,” is one of the NWC’s seven priority campaigns for 2025.

In this Sunday Read we will examine how these hurdles undermine the program’s success and deter would-be whistleblowers. We will also discuss new communications between the NWC and Congressional allies and what Korb’s nomination could mean for the IRS Whistleblower Program.

IRS Whistleblower Program Basics

The IRS Whistleblower Program incentivizes individuals to report specific and credible information about tax non-compliance, fraud, or underpayment of billions of dollars in taxes. As previously discussed, when such information leads to the collection of taxes, penalties, or interest from non-compliant taxpayers, the whistleblower may be eligible for a monetary award.

Since its 2006 overhaul, the IRS Whistleblower Program has delivered more than $7.5 billion back to the Treasury, making it a proven, cost-effective weapon against tax fraud.

In fiscal year 2024, the IRS confirmed it had paid awards totaling approximately $123 million based on tax and other amounts collected of approximately $475 million attributable to whistleblower information.

Why Reform is Needed

Mounting delays in award payments, decreasing payouts, and flawed bureaucratic policies have hurt the IRS Whistleblower Program’s reputation.

Historically, awards were paid promptly as each taxpayer was finalized, consistent with Treasury Regulations and congressional intent. This was commonly referred to as “disaggregation.” But an update to the Internal Revenue Manual (IRM) issued in September 2024 [25.2.2.6.1.1] said that the whistleblower must wait until all related cases are resolved to collect a payment.

Now, whistleblowers reporting major schemes—such as institutional tax evasion—must wait for every related taxpayer’s case to be fully adjudicated before receiving any payment, a process that can take a decade or longer.

“The [updated] policy came out in a positive way to encourage payments,” said Dean A. Zerbe, NWC’s senior policy analyst and former Senior Counsel and Tax Counsel on the Senate Finance Committee for Sen. Charles E. Grassley (R-IA).

He added that the “wrinkle” was that banks need to be fully adjudicated, as well as all the clients of the bank prior to the whistleblower award distribution. This practice does away with the disaggregation that regularly benefited whistleblowers.

“This could easily add years to an award being paid,” Zerbe added. Correcting this oversight has been a top priority of the NWC’s campaign for IRS Whistleblower reform.

Key Policy Fixes: Disaggregation and Award Caps

On Sept. 9, 2025, the NWC addressed the Senate Whistleblower Caucus in light of Korb’s nomination. In its communique, the NWC called on the IRS Chief Counsel and Congress to immediately address two central issues:

Restore Disaggregation Flexibility

Treasury regulations plainly allow the Whistleblower Office to aggregate or disaggregate claims, so that awards can be paid on a rolling basis as cases conclude. The current blanket restriction, imposed by Counsel without notice-and-comment, forces harmful award delays and violates both statutory language and fair administrative practice.

Remove Arbitrary Caps on Older Awards

The IRS’s cap policy—limiting older awards regardless of the value provided or the size of recoveries—is unique among federal whistleblower programs and has no basis in statute or regulation. The longer the delay, the lower the maximum cap, meaning those who have waited the longest and delivered the greatest value are punished the most. No other whistleblower award program (including False Claims Act, SEC, or CFTC) imposes such limitations.

Bipartisan Congressional Support and a Roadmap for Change

Reforms have strong bipartisan support in Congress. Senators Grassley and Wyden have repeatedly introduced the IRS Whistleblower Improvement Act, and related measures have appeared in draft budget bills—though key provisions did not make it into the current “One Big Beautiful Act.” NWC has mobilized its base to demand inclusion of these reforms in upcoming budget legislation and continues to press for restoration of prompt, fair awards and elimination of arbitrary limitations.

Through his past actions and statements, Korb made it known that he opposed Grassley’s 2006 whistleblower program reforms. But Zerbe noted that Korb’s new perspective on the matter, as evidenced by his many answers during questioning by the Senate Finance Committee on Sept. 11, 2025, is an encouraging sign for NWC and all whistleblower advocates.

“Mr. Korb has stated that he has a Damascene transformation and now sees the value and benefit of the whistleblower program,” said Zerbe, who added that Korb is a respected tax attorney. “And certainly, the marked success of the whistleblower program is undeniable, with billions brought into the Treasury and better targeting of limited IRS examination resources.”

Should Korb’s nomination advance, NWC urges the Senate to secure his commitment to:

• Withdraw restrictive policies blocking timely disaggregation of whistleblower claims.
• Eliminate unjustified caps on older awards.
• Guarantee standardized, fair, and prompt processing consistent with congressional intent and Treasury oversight.

The Path Forward

Immediate enactment of these reforms—through policy change, regulatory guidance, and statutory update will revitalize the IRS Whistleblower Program. Such change will enhance anti-fraud enforcement, deter tax evasion, and reaffirm the United States’ leadership in protecting whistleblowers and the public interest.

“We are fortunate to have Senators Grassley and Wyden as champions of whistleblowers and that they are open to hearing the concerns raised by the NWC,” Zerbe said. “I think both senators conveyed their concerns to Korb in his confirmation hearing as to the whistleblower program and my hope is that will help focus and prioritize the work of the Office of Chief Counsel.

Additional Resources

The decision to come forward is not one to be taken lightly, nor should selecting a whistleblower lawyer. NWC provides resources that can connect you with the right legal professional prior to taking any action.

Subscribe to the Sunday Read series for more developments and perspectives on the IRS Whistleblower Program.

Support NWC

NWC works tirelessly to strengthen whistleblower programs and educate the public about their value. As a 501(c)(3) nonprofit, our work relies on donors like you.

💙 Donate today to help us continue advocating for whistleblowers.

🎁 Special Offers: Donors of $50 or more will receive a free copy of Stephen M. Kohn’s latest book, Rules For Whistleblowers: A Handbook For Doing What’s Right.

🎁 Donors of $100+ will receive Rules For Whistleblowers and an exclusive NWC t-shirt.

This story was written by Justin Smulison, a professional writer, podcaster, and event host based in New York.