The Internal Revenue Service paid fewer than 100 whistleblowers last year, about half the number it paid two years ago, even though it received more than twice the number of whistleblower cases.

In a recently released fiscal year 2010 report to Congress cited on the TaxProf blog, the IRS reported that it received 7,577 whistleblower cases under Section 7623(a) of the Tax Code, but paid out only 97 awards. In fiscal 2008, the IRS received 3,704 cases and paid out 198 awards. Many cases, it noted in the report, can take several years to settle.

The IRS paid only a few more awards in fiscal 2009 than in fiscal 2010, 110 awards, which was also a drop from fiscal 2008.

“The number and amount of awards paid each year can vary significantly, especially when a small number of high-dollar claims are resolved in one year (as was the case in 2006 and 2008),” the agency explained. “One factor contributing to the lower award payments in FY 2009 was a change in the IRS definition of the point at which proceeds in a tax case are available to make an award payment. In the past, the IRS monitored the tax case to ensure that it collected proceeds before processing the award claim. Where the taxpayer filed an administrative or judicial appeal, the IRS did not pay claims until the court finally resolved the appeal.”

The total amount of the awards paid in fiscal 2010 was $18,746,327, far higher than the $5,851,608 paid out in fiscal 2009, but still below the more than $24 million paid in fiscal 2006 and $22 million in fiscal 2008.

The IRS recently expanded its whistleblower program, upping the maximum award to 30 percent of the proceeds collected. In April, it paid a CPA $4.5 million as the first award under the expanded program (see CPA Receives $4.5M Whistleblower Award).

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