IRS Whistleblower Program – Deadlines Drives Success
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The revised IRS whistleblower program is on its 13th year. The good news is that last year the IRS disclosed it collected $1.5 billion as a result of whistleblowers. However, the bad news was that it took an average of 9.32 years for the IRS to pay an award to the whistleblower. In order for the IRS to increase the success rate of the whistleblower program, there needs to be deadlines; for example, the IRS’ April 15th return filing deadline is probably one of the most recognized deadlines.
The IRS has not publicly imposed any deadlines for certain activities to be completed with respect to the whistleblower program. Therefore, to the extent that it has imposed internal deadlines they are secret and are unreliable. Because of the lack of such deadlines there is a 9.32 year wait for the payment of an award. Therefore, Congress must step in and set deadlines for the completion of certain activities to hold the IRS accountable and have measurable outcomes. The new deadlines must be firm but allow for some flexibility to meet the unique facts of a particular case. With deadlines, the IRS and its personnel, can now be held accountable for its failures and rewarded for its success.
Imposing deadlines will provide the following benefits to the Whistleblower Program:
Reliability – which is necessary for any successful program. Both IRS personnel and whistleblowers should be able to rely on certain events happening in measurable times after stated events (i.e. submission of whistleblower claim and starting of audit in 90 days, issuing a preliminary award recommendation letter within 90 days after collection, etc.), thereby ensuring that claims are being processed in a timely manner.
Cost Savings – missed deadlines have the potential of being costly (i.e. unintentional expiration of statute of limitations for assessment/collection, unnecessary litigation by the parties, etc.).
Professionalism – meeting deadlines conveys to the individuals submitting whistleblower claims at great risk to themselves that their help is greatly appreciated. IRS should not allow 9.32 years without any contact with a whistleblower and awards for claims should be processed in a timely manner.
Respect – often Whistleblower's invest substantial amount of time and costs to file a whistleblower claim in a timely manner. The IRS should do the same. It is easy for an institution like the IRS (with over 75,000 employees) to lose track of claims as they travel through different departments with no accountability.
The Whistleblower Statute, the Treasury Regulations and Internal Revenue Manual only impose two deadlines with respect to the whistleblower program, and both are with respect to the time in which the whistleblower must file an appeal (administrative judicial).
The IRS has no (stated) deadlines in which they must process claims, send claims to the Operating Division for examination/investigation, receive processed and reviewed claims from Operation Division, send out a determination letter, or pay an award.
Conclusion
Currently, the IRS operates under deadlines to timely assess and collect taxes, which was developed over the years by Congressional implementation of fixed deadlines for completing certain tasks in the audit of returns and collection of taxes by the IRS. Congress should do the same for the IRS Whistleblower Program and imposing fixed deadlines on the IRS to ensure the success of the whistleblower program.
| Author: Thomas C. Pliske is a former IRS attorney. He established the Tax Whistleblower Law Firm in 2008. The law firm’s sole practice is representing Whistleblowers before the IRS and the U.S. Tax Court. |