The answer is an obvious…Yes! The IRS Office of Appeals was established to be an independent organization within the IRS to assist taxpayers in resolving their tax disputes through an informal, administrative process. The primary responsibility of the Appeals Office is to review cases after the IRS examination division has made its decision with respect to a tax deficiency and offering an objective point of view on each appealed case.
So, why does the IRS Whistleblower program not provide for an independent review of the determination of award? When an IRS Whistleblower Analyst makes a determination of award and it goes through two levels of review, it is difficult for the Analyst to recommend changes to his or her initial determination after an administrative appeal by the Whistleblower. In fact, to do so could be acknowledging he/she may have gotten it wrong the first time by not considering all the facts or a proper interpretation of the law. Although, currently unknown, there are likely far more new determinations of award being made after a judicial appeal over that of an administrative appeal, resulting in a waste of resources and unnecessary litigation by the parties and the U.S. Tax Court.
Shortly after the 1998 Tax Restructuring and Reform Act, the IRS Appeals Office began to offer taxpayers a Collection Due Process Hearing on collection matters, in order to provide independent review in collection cases where levies were issued or liens were filed. As the IRS well knows, it is far more efficient to handle matters like these administratively rather than through the court system. However, twelve years after the whistleblower program began, there remains no independent review of the determination of award within the IRS organization. The Whistleblower Office remains in the firm control of a small number of individuals that appear to be more interested in rejecting or minimizing awards. Perhaps this advice is coming from higher in the organization where there seems little eagerness to utilize the most powerful enforcement tool (the Whistleblower Program) that could have been given to it by Congress.