Jan 29 A top Republican on the Senate Finance
Committee said that rules proposed to improve the Internal
Revenue Service's whistleblower program may not be effective
because they limit awards and discourage informants from coming
The proposed rules, drafted by the IRS, are an attempt to
clarify for whistleblowers and their lawyers as well as IRS
staff and the public how rewards will be paid to informants and
other general rules such as how to submit information.
The IRS whistleblower program gathers information from
people who want to alert the agency to possible wrongdoing.
But the proposed changes don't go far enough in improving
communications with whistleblowers, thereby "crippling the most
successful program the administration has to go after the big
time tax cheats," Senator Charles Grassley wrote in a letter
sent late Monday to acting Secretary of the Treasury Neal Wolin
and Steven Miller, acting IRS commissioner.
Grassley's concerns echo those voiced by lawyers for
whistleblowers that the proposed rules, issued in December,
could make collecting awards more difficult.
The Iowa Republican co-authored the 2006 law that overhauled
the whistleblower program by establishing an office within the
IRS to oversee financial awards paid to informants.
Whistleblowers, generally current or former employees of a
firm, bring evidence of potential wrongdoing to the attention of
the IRS. In exchange they receive up to 30 percent of whatever
additional tax collections are made based on their information.
In the 2011 fiscal year, the program collected only $48
million in tax revenue, down from $464 million in fiscal 2010,
as the number of cases declined. As a result, payments to
whistleblowers dropped to $8 million in fiscal 2011 from $18
million in fiscal 2010.
Concerns that the whistleblower division has insufficient
staff and resources and that its reports to Congress are
delayed, were also outlined in the letter.
The IRS did not immediately respond to request for comment.