Is the IRS retaliating against its own whistleblower?
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As found in this article in the Washington Post, the IRS is facing questions as to whether it is retaliating against one of its own attorneys whom allegedly blew the whistle on how the IRS failed to identify "a multibillion-dollar corporate tax credit scheme involving a source of energy informally known as black liquor."
According to the Washington Post, William Henck, an attorney working inside the IRS Office of Chief Counsel for over 26 years, (see the powerline blog for a first person account by Mr. Henck) publically questioned the IRS' policy on refundable biofuels tax credits designed to foster new technologies but were being used by paper companies to receive huge refunds for burning pulp byproducts (known as "black liquor") since the 1930s. See Washington Post article that quotes Henck.
The latest article and Henck's own account reflect the IRS auditing the Henck's returns and the IRS placing Henck's status at the IRS in limbo with the IRS and Treasury Inspector General's (TIGTA) office failing to properly investigate whether Henck committed any wrongdoing.
This account by an insider at the IRS raises serious questions about the IRS' commitment to investigate tax fraud even when reported by an attorney among its ranks. It echoes an account by Jane Kim, a 10 year veteran chief counsel attorney in the Small Business/Self Employed Division outlining abuse at the IRS which resulted in tax cheats getting away without paying their taxes. See this Tax Analysts' article.
This story also raises questions how committed the IRS is to investigate claims raised by whistleblowers under its Tax Whistleblower Program. Despite Lee Martin's (Director of the IRS Whistleblower Office) statements to the contrary (see this blog on statements made by Lee Martin during Tax Whistleblower Bar call), this account can and may already have a chilling effect on the number and quality of submissions to the Whistleblower Office.
Nonetheless, if you know of tax fraud or tax violations committed by an individual or a corporation, and wish to report the violations to the IRS, contact us to prepare your tax whistleblower claim. The IRS pays between 15-30% of the collected proceeds (tax, penalties, interest and additional amounts) for specific and credible information the IRS uses to prosecute the alleged tax violators.