The Internal Revenue Service paid out $53 million in whistleblower awards last year, a steep decline from the $125 million paid to whistleblowers in 2012, according to an annual report by the IRS Whistleblower Office.

The IRS also paid out slightly fewer award claims to whistleblowers last year, 122 as opposed to 128 in 2012. However, both figures were higher than in 2011 and previous years. In 2011, the IRS paid 97 awards, for a total of $8 million. In addition, 2012 had marked a banner year for collections of over $2 million from whistleblower tips, with 12 qualifying for that designation.

The IRS explained the lower awards from a budgetary perspective in the report. “In FY 2013, the total award payments were reduced by $464,706, as required by the Balanced Budget and Emergency Deficit Control Act of 1985, as amended, for awards paid on or after March 1, 2013,” said the report. “The total award amount before reductions was $53,519,630, representing 14.6% of total amounts collected.”

The Tax Relief and Health Care Act of 2006 enacted significant changes in the IRS award program for whistleblowers, the report noted. For information provided to the IRS after Dec. 19, 2006, the new Section 7623(b) that was added to the Tax Code generally requires the IRS to pay awards if information that an individual provides substantially contributes to the collection of tax, penalties, interest, and other amounts when the amounts in dispute are more than $2 million. The law set award ranges based on percentages of the collected proceeds, and established a Whistleblower Office within the IRS to administer those awards. However, the report also showed that 799 claims were still open that were received prior to 2007, 1,373 dating back to 2007, 1,060 from 2008, 2,025 from 2009, 6,253 from 2010, 2,308 from 2011, and 3,095 from 2012.

Sen. Chuck Grassley, R-Iowa, who wrote the law in 2006 providing for larger IRS whistleblower awards, commented Friday on the report. “The good news is the IRS continues to get whistleblower tips and is making some pay-outs,” Grassley said in a statement. “I’m glad to see that, and I appreciate the IRS’ work to make the program a success. The bad news is the progress in making pay-outs is slow. The agency should do everything it can to make these cases a priority. My worry is that the slow progress will cause the tips to dry up. That would harm the whistleblowers who stick their necks out to flag tax cheating and the honest taxpayers who pay what they owe and deserve tax fairness. It can take awhile, and too long, for an agency to accept a whistleblower program. It happened with the Justice Department when the qui tam amendments were enacted in the 1980s. So, supporters of whistleblowers need to stand firm. We can’t let up. The qui tam amendments have recovered more than $40 billion that otherwise would be lost to fraud. The potential for major tax fraud recovery is just as strong with the IRS whistleblower program.”

The report showed that the IRS received 92,68 tips from whistleblowers last year, up slightly from the 9,239 it received in 2012 and ahead of the 8,084 it received in 2011, but far less than the 13,155 it received in 2010, which was the most of any year since the program was established.

The tips last year led to the collection of $367 million in taxes, far less than the $592 million collected in 2012 and $464 million in 2010, but ahead of the $48 million collected in 2011 and $206 million in 2009.