At the end of September Iowa Senator Charles Grassley sent another in a long line of scathing letters to the IRS concerning its ineffective whistleblower program, a program Grassley himself helped to create back in 2006. Grassley sent his letter to the incoming IRS Commissioner, John Koskinen, asking that Koskinen take his concerns about the program seriously and report back with a possible plan of action.
Grassley began his letter by noting that the whistleblower program at the IRS is a powerful tool that was created to assist IRS agents in identifying and collecting money from tax cheats. Despite the potential power of the program, the IRS has yet to fully capitalize on it, refusing to move quickly on valuable tips and failing to communicate effectively with tipsters or their attorneys.
Grassley noted that one area where the IRS could improve would be to enter into contracts with whistleblowers and their attorneys who are attempting to assist the IRS in its work. Grassley points out that this is something the Department of Justice has done for decades when pursuing False Claims Act cases and it has generated billions of dollars in revenue. Grassley says that rather than run with the opportunity to partner with whistleblowers and their attorneys, the IRS has buried it, delegating the authority to make such decisions to IRS field offices that are ill equipped to make such decisions. Grassley says contracting should be made a priority of the IRS in the future.
Grassley takes the IRS to task for creating a certain level of distrust between itself and whistleblowers. A glaring example of this is the case of Anonymous 1 and Anonymous 2 v. Commissioner, which deals with an instance where the IRS whistleblower office denied a whistleblower's claim immediately before deciding to open its own investigation into the same company identified by the whistleblower. In that embarrassing case, a Tax Court Judge ended up admonishing the IRS for misleading the court into believing the new investigation was arrived at independently.
Grassley says that cases like this give whistleblowers who may be considering coming forward with valuable information pause. If the IRS is serious about encouraging the use of its whistleblower program then it must make it a priority to treat the people who are willing to put their careers on the line with the respect and consideration they deserve. If not, then the tips will eventually dry up and a lucrative stream of cases that the IRS might never have known about will disappear.
Sources:
September 26, 2013: Letter To John A. Koskinen by Charles Grassley, published at Grassley.Senate.gov on September 27, 2013
Source: "Push for Private Debt Collection Clouds IRS Confirmation by Diane Freda, published at Bloomberg.com on October 1, 2013
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