2016 Tax Sequestration Rate Reduces Whistleblower Awards

/

Today, November 3, 2015, the IRS Whistleblower Office announced that it will continue to reduce Whistleblower Awards by 6.8%.  The IRS claims that the Balanced Budget and Emergency Deficit Control Act of 1985, as amended, allows it to reduce whistleblower award payments because of sequestration.

Therefore, award payments made to whistleblowers under Section 7623 on or after October 1, 2015, and on or before September 30, 2016, will be reduced by the fiscal year 2016 sequestration rate of 6.8 percent. The fiscal year 2015 sequestration rate was 7.3 percent.

The sequestration reduction rate will be applied unless and until a law is enacted that cancels or otherwise impacts the sequester, at which time the sequestration reduction rate is subject to change.

The sequestration reduction will be applied after the Whistleblower Office determines the amount of collected proceeds and the applicable award percentage to be paid under section 7623.

Currently, the Tax Whistleblower Law Firm has several court cases on appeal that are currently pending before the United States Tax Court challenging the authority of the IRS to unilaterally reduce these awards for sequestration.  In addition, the whistleblower statute, I.R.C. § 7623, provides “Any amount payable under …. shall be paid from the proceeds of amounts collected by reason of the information provided, and any amount so collected shall be available for such payments.”  This alone would lead one to believe that the payment of the award, once it is determined, is not discretionary.

2015 Annual Report on the IRS Whistleblower Program is Expected Sooner than Later.

/

 When Congress authorized the new IRS Whistleblower Program in December 2006, it required annual reporting to Congress about how the new whistleblower provisions were being used, the results obtained, and any recommendations to be implemented to improve the program.  This was essentially a report card by the Whistleblower Office that informed the world what it had accomplished and the direction it was moving.  This was also Congress’ way of evaluating how the most powerful tool for tax enforcement that Congress could have given the IRS was being used.

Read More

IRS WHISTLEBLOWER OFFICE

/

The Tax Relief and Health Care Act Of 2006 authorized the IRS to establish an IRS Whistleblower Office with the purpose to centralize and monitor tips from whistleblowers so that awards would be paid in a timely manner. 

Read More