WASHINGTON Dec 17 The U.S. Internal Revenue
Service has proposed new rules for corporate tax whistleblowers
that tax lawyers said may narrow whistleblowers' ability to
collect cash awards for information about possible misconduct.
If the tipster's information overlaps with an audit the IRS
is already conducting, an award might be denied, lawyers said,
adding that this was not previously clear.
The public has until Feb. 19 to comment on the proposed
rules, which the tax agency released late on Friday.
"It could narrow the scope of what is award-eligible," said
Scott Knott, a lawyer at The Ferraro Law Firm.
The IRS whistleblower program gathers information from
people who want to alert the agency to possible wrongdoing.
Last year, the program collected only $48 million in tax
revenue, down from $464 million in fiscal 2010. New
whistleblower cases were down as well.
Republican Senator Charles Grassley of Iowa - co-author of
2006 legislation that overhauled the program - has criticized
the IRS this year, saying it has driven away whistleblowers.
The IRS pays whistleblowers only for information that the
agency could not have found on its own. Most big corporations
are audited by IRS every year.
Whistleblowers cannot collect an IRS reward until the agency
collects taxes based on the tipster's information. A
whistleblower can get up to 30 percent of the total taxes