The Internal Revenue Service nearly doubled the amount of money it paid to tax whistleblowers last year and is taking steps to make the process move faster.

A new report from the IRS Whistleblower Office indicated the total amount of awards paid in fiscal year 2015 increased to $103,486,677 from over $52,281,628 in fiscal year 2014, even though the total number of awards decreased slightly to 99 from 101.

“FY 2015 was a big year for awards under the Whistleblower Program, with 99 awards made to whistleblowers totaling more than $103 million before sequestration, which reduced the total payouts,” wrote IRS Whistleblower Office director Lee D. Martin.

While the number of claims received in fiscal 2015 from tipsters declined 17 percent from the prior year to 12,078 claims, the total number of claims closed increased by 27 percent for the same period to 10,615 claims closed in fiscal 2015. 

“Since 2007, information received from whistleblowers has assisted the IRS in collecting over $3 billion in tax revenue, and the IRS has awarded more than $403 million to whistleblowers,” said Martin.

He noted the IRS is looking for ways to streamline the process. In FY 2015, the IRS initiated a program review of the Whistleblower Office to identify opportunities to maximize the efficiency and effectiveness of the claim process. Those include, among other things, leveraging IRS expertise and resources, both within and beyond the Whistleblower Office, to strengthen the overall program. Once the review is completed and recommendations are finalized, he said the IRS will proceed with implementation.

However, Martin acknowledged that many of the steps in the whistleblower claim process cannot be expedited or shortened. For example, the length of an IRS examination varies based on the complexity of the issues, taxpayer cooperation and documentation, and other factors that exist whether a whistleblower is involved or not.

“Likewise, the IRS cannot expedite the time required for the expiration of appeals rights and refund rights,” he added. “These are prerequisites to the payout of a whistleblower award that can add several years to the waiting period before an award is paid.”

Sen. Chuck Grassley, R-Iowa, who drafted the 2006 provisions that improved the IRS whistleblower office to combat tax fraud, saw positive trends in the report, but criticized the report for leaving out some key information about how long it takes to award whistleblowers for their tips.

“The uptick in awards paid out under the mandatory award program is good news,” Grassley said in a statement. “Whistleblowers have long been frustrated with the lack of awards, which may be part of the reason claims were down 17 percent from previous years. I hope the increase in awards will reverse this trend and send a signal of things to come. I also was glad to see positive statements about the program by the new director of the whistleblower office, as well as his effort to release this report in a much more timely manner than in previous years. The information about the whistleblower program is helpful for the public and for Congress in knowing how the whistleblower office is performing. I appreciate that the report adopted GAO recommendations that will make it easier for Congress and others to evaluate the program from year to year. But I’m concerned that it looks as if the IRS has dropped some of the more detailed information it provided before about how long it takes claims to move through each step of the process. That’s an important data point. Whistleblowers often put their livelihoods on the line to point out tax fraud, and they need assurances that the IRS will move their cases along as quickly as possible.”

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access