IRS Tax Whistleblower Articles

New IRS whistleblower rules may limit some rewards - lawyers

By Patrick Temple-West

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WASHINGTON, Dec 17 (Reuters) - 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 collected.