2009: for IRS whistleblowers, not a banner year

by Kurt Schulzke

The IRS has — at long last — published its fiscal year 2009 whistleblower program results.   As in 2008, the input stats are impressive but the output stats … well, um, there aren’t any.  Since the Section 7623(b) program’s official start in January 2007, not a single whistleblower has yet received an award.  While the IRS tries hard to make it clear to whistleblowers that their claims may take years to develop, the longer it takes to get the awards flowing, the more likely it will be that potential whistleblowers will conclude that the substantial risks of blowing the whistle outweigh the potential rewards.  For what it’s worth, here’s an excerpt from the IRS report to congress which, oddly enough, has no cover page:

During FY 2009, the IRS received 460 whistleblower submissions relating to 1,941 taxpayers8 that appeared to meet the $2 million of tax, penalties, interest, and additions to tax threshold in section 7623(b). Many of the individuals submitting information to the IRS claimed to have inside knowledge of the reported transactions, often with extensive documentation to support their claims. We cannot yet tell how many of the cases will result in collected proceeds after examination or investigation, as the amounts alleged reflect only the whistleblower’s estimate of the potential recovery. Only 5 of 110 full paid claims in 2009 involved collections of more than $2 million, and only one involved collections of more than $10 million.

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