U.S. IRS paid record $125 mln to whistleblowers in 2012-report

Wed Feb 13, 2013 1:05pm EST

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By Nanette Byrnes
    Feb 13 (Reuters) - The U.S. Internal Revenue Service paid a
record $125.4 million in 2012 to whistleblowers who provided
evidence of tax cheating, including a massive payout to a former
employee of Swiss bank UBS AG, according to an IRS
report made public on Wednesday.
    The IRS whistleblower program has been criticized for moving
too slowly and putting inadequate resources behind its efforts,
causing whistleblowers to grow reluctant to file claims. The
program was overhauled by Congress in 2006 amid such criticism.
    The report marks an increase in awards paid from $8 million
in 2011. The IRS also reported a jump in collections of
previously unpaid taxes and penalties resulting from the
program, up to $592.5 million last year from $48 million in
2011.
    Award payouts in 2012 were boosted by a $104 million reward
the IRS paid to Bradley Birkenfeld, a former employee of UBS AG
. He helped wealthy Americans hide millions of dollars
in secret Swiss accounts and later told the IRS about it.
    The number of new whistleblower submissions rose to 332 in
fiscal 2012 from 314 the year before, but remained well below
the high water mark of 472 in 2009. The average number of days
the IRS spent evaluating an award rose to 1,141 in 2012,
according to the report, from 285 the year before.
      
     
    In a letter accompanying the report sent to Senator Charles
Grassley, IRS Acting Commissioner Steven Miller voiced
commitment to the program and predicted the pace of awards paid
would increase. Grassley is the Iowa Republican who co-authored
the 2006 overhaul and who has been a vocal critic of the
program's implementation.
    In his letter, Miller said a public hearing is likely to be
scheduled on the program's rules after a public comment period
closes February 19.  

 (Editing by Kevin Drawbaugh and Andrew Hay)
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