Last September, Senator Chuck Grassley wrote a letter to Internal Revenue Service Commissioner Douglas Shulman detailing his disappointment of how poorly the agency was using whistleblower provisions available to them under the False Claims Act. The 2006 reforms were designed to give the IRS the ability to pay out large rewards to those who provided information about tax cheats defrauding the government.
In a recent post, the Wall Street Journal discusses another of Grassley's letters, this one asking for specific reforms, such as reevaluating how much "outside assistance of counsel" the IRS would ask for and shortening the oftentimes years long delay between the reporting of a tip and final disposition of a case.
While Grassley did state that he appreciated the "plodding but steady progress" the IRS was making in fixing the program, he still had harsh words for how the program was managed. Beneath the barely managed pleasantries in the first paragraph it is clear that Senator Grassley was absolutely livid with the IRS's intransigence.
In a critical letter dated April 30, 2012, to both Treasury Secretary Timothy Geithner and Commissioner Shulman, Grassley specifically expressed outrage at the IRS's participation in the Offshore Alert Conference held at Miami Beach. The conference seemed largely targeted towards "offshore clients" and investigators, not at whistleblowers themselves. To wit:
[I] am skeptical that it is even appropriate for [two IRS employees listed as Featured Speakers] to attend. There is certainly no reason for nineteen IRS employees to attend the conference[...] [The] target audience for this conference is not whistleblowers, and, in a challenging fiscal time, this is not the best use of IRS resources. (emphasis included in the original)
Further, the letter indicated that the IRS has ignored Grassley's requests to both find a way to clear the backlog of whistleblower claims (which has apparently gotten worse in the past seven months) and to report to the Senate the status of the backlog of claims.
The vitrol only increases further in the letter when Grassley all but accuses the IRS Whistleblower Director of advocating those who promote offshore tax evasion (which seems to be how he characterizes the conference at Miami Beach). One of the demands in the letter is not only a log detailing the Whistleblower Director's travel for the past three years (including justifications and expense summaries), but also an immediate curtailing of future trips.
The letter continues on, describing a number of issues that Grassley has raised in previous communications that were either ignored or stymied by the IRS. These issues include, but are not limited to, educating IRS employees about whistleblower provisions, statutes of limitations vis-à-vis awards, the inefficiency of the Whistleblower Executive Board, and the continued delays in providing the whistleblower report for fiscal year 2011 to the GAO.
The letter concludes with Senator Grassley requesting that any response to his concerns be delivered under either Commissioner Shulman's or Secretary Geithner's name because of his "concerns" that the IRS Whistleblower program does not have the agency's full support.
"Concerns" is a mild word to describe the animosity that has built up in this standoff between the IRS and Congress. Of course, those who lose out the most are the whistleblowers themselves who take great risks to bring claims forward, only to see them languish for unacceptably long periods of time.
Source:
IRS Whistleblower Program Under Fire, by Laura Saunders, published at WSJ.com, May 10, 2012.
See Our Related Blog Posts:
Whistleblowers and the IRS
Primer on the Foreign Corrupt Practices Act
