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Jul 01

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Will the IRS finally get serious about its whistleblower program?

A June 20, 2012 memorandum from Steven Miller, IRS deputy Commissioner for Services and Enforcement, acknowledges that the IS has done a poor job with it whistleblower program, and seeks to establish a new standard of much better responsiveness.

This article describes the program that was signed into law at the end of 2006. Miller’s memorandum notes that:

Since that time, thousands of whistleblowers have reported hundreds of millions of dollars in suspected tax compliance issues, resulting in a wide range of audits and investigations. Some of these audits and investigations have yielded significant results, demonstrating that whistleblower information can be an important tool in our compliance programs.

Miller wants more timely action on the large backlog of whistleblower allegations. He wants all claims to be initially evaluated within 90 days, and then reviewed by subject matter experts 90 days.

The new policy also will involve direct contact with the whistleblowers to obtain additional information. Currently, this rarely happens. The memo states:

Some whistleblowers have insights and information that can help the Service understand complex issues or hidden relationships. Debriefing, whether in person or by telephone, is an important component of the evaluation of whistleblower information prior to a decision on whether the information should be referred to the field for audit or investigation. My expectation is that debriefings will be the rule not the exception. Further, with appropriate controls, interaction with a whistleblower during an examination can assist in timely and correct resolution of issues.

This article describes the enormous level of underreporting and complete non-reporting of taxes. In light of well-publicized government deficits and the temptation to increase taxes, it would be a good idea to collect those taxes that already are authorized and should be paid.

 

About the author

David Nolte

I am a founding principal of Fulcrum Inquiry, an accounting and economic consulting firm that performs damage analysis for commercial litigation, forensic accountings, financial investigations, and business valuations. I am a Certified Public Accountant (CPA) and an Accredited Senior Appraiser (ASA), as well as having other professional credentials. I regularly serve as an expert witness involving damages measurement. My litigation-oriented resume is on Fulcrum's website.

Permanent link to this article: http://betweenthenumbers.net/2012/07/will-the-irs-finally-get-serious-about-its-whistleblower-program/

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