By DANA LIEBELSON
The Internal Revenue Service (IRS) is still dragging its feet when it comes to ensuring whistleblower claims are met in a timely manner, according to a new report released by the Government Accountability Office.
The report examines the IRS whistleblower program since it was expanded by the Tax Relief and Health Care Act in 2006. The program aims to encourage people with information on big-dollar tax fraud to come forward—and also send billions to the U.S. Treasury. When citizens reveal cases involving more than $2 million in unpaid taxes, the 2006 Act requires the IRS to award the whistleblower between 15 and 30 percent of the total amount recouped by the government.
That’s how it’s supposed to work anyway—in reality, whistleblower claims can take years to go through the IRS review and award process. The IRS has received tips on more than 9,500 taxpayers from 1,300 whistleblowers since the program began. According to the report, as of April 2011, about 66 percent of claims submitted in the first two years of the program—2007 and 2008—were still being processed.
“I’m concerned that the IRS management still might have too many opportunities to say ‘no’ to a whistleblower, even when the whistleblower office believes a claim has merit…we can’t let the next Madoff get a free pass just because someone doesn’t want to be bothered” Senator Charles Grassley (R-Iowa) wrote in a press release.
Grassley was responsible for introducing the 2006 expansion of the whistleblower program. He also criticizes the IRS in the press release for being short on resources, but not taking advantage of the resources provided by the whistleblower program.
This isn’t the first time the IRS has been criticized for not taking advantage of the whistleblower program. In August, several oversight groups sent a letter to the IRS showing that key whistleblowers were discouraged from stepping forward, due to an overly broad clause that said the IRS could deny an award if the whistleblower “planned and initiated” actions leading to tax evasion—even if the whistleblower wasn’t the chief architect.
The new report offers several recommendations to help improve the IRS’s relationship with the Whistleblower Office, chief among which is for the IRS to collect more data on the time each step in the claiming process takes, and then follow-up on claims that exceed timelines.
To see the full list of recommendations, which will be updated as the appropriate government offices take action, click here.
Dana Liebelson is the POGO Beth Daley Impact Fellow
Image from Gage Skidmore
Comments