IRS Whistleblower program takes downturn

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The IRS today released to the U.S. Senate its annual update on its whistleblower program, which was characterized by numerous attorneys quoted in Sunday’s Pittsburgh Post-Gazette as a failure.

According to the IRS report, the number of tips received by the IRS Whistleblower Office rose slightly in the 2013 fiscal year compared to the prior year, but the payments by the program and taxes recovered declined.

Would-be whistleblowers made 9,268 claims to the IRS during 2013 — the second highest year on record.

The IRS used those tips to collect $367 million in taxes, which ranked third among the years since the program was revamped, but was far behind the $592 million in collections through the program in 2012.

The IRS made $53 million in payments to 122 whistleblowers last year — both of which were lower than in 2012.

According to the report by the 36-person IRS Whistleblower Office, the “number of payments made under the [revamped] program is not projected to grow dramatically in [fiscal year] 2014. As discussed, it typically takes five to seven years to analyze, investigate and/or audit, and collect proceeds.”

The report indicates that the office would like Congress to add a provision to the law that would protect tax whistleblowers from retaliation.

The IRS whistleblower program, revamped by Congress in 2006 to mandate payments to tipsters who help the agency collect at least $2 million, came under fire from attorneys who said it was too slow and sometimes took information but provided no reward.

See more in Sunday's Post-Gazette.

Rich Lord: or 412-263-1542. Twitter @richelord.

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