The IRS is bound by act of Congress to pay tax whistleblowers up to 30 percent of the revenue collected as a result of information they provide, so long as the amount in dispute is more than $2 million. But the Government Accountability Office (GAO) does not believe the IRS is complying like they should.
Since the Whistleblower Office was established in early 2007, IRS has received over 1,300 whistleblower submissions qualifying for the expanded program, alleging tax noncompliance by more than 9,500 taxpayers. As of May 12, 2011, IRS has paid a small number of awards under the expanded program. . . . As of April 2011, about 66 percent of claims submitted in the first 2 years of the program, fiscal years 2007 and 2008, were still in process. ~ GAO
Of course, the IRS can’t officially say exactly how much award money has been paid to whistleblowers because it would violate the IRS’s privacy protections. The same protections apparently prevent the IRS from keeping whistleblowers in the loop as far as the status of their claims.
The Whistleblower Office is a mess. Is it really too surprising though, that the agency charged with collecting revenue has a hard time dishing it back out? The IRS has buried itself in minutia on these cases to, as they say, “ensure the integrity of the claim.” It’s not collecting data on the amount of time each step in the process takes, and it has failed to establish deadlines and accountability for those working these cases. If the IRS wants this program to incentivize whistle-blowing and voluntary compliance, then it had better turn things around. If not, the Whistleblower Office is going to quickly make a bad name for itself.
See full report here.