More tax whistleblowers were rewarded last year, but they got less money

January 15, 2017

It's been 10 years since the Internal Revenue Service Whistleblower Office was created to reward those who turn in tax cheats.

It's been a pretty good decade. In particular, notable advances were made last year, according to the Whistleblower Office's fiscal year 2016 annual report.

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More rewards, less money: The Whistleblower Office awarded more than $61 million to 418 whistleblowers in the last fiscal year. That's a 322 percent increase from fiscal 2015, in which only 99 total awards were paid.

The number of whistleblower claims filed last fiscal year also was up 6.4 percent from those submitted the prior year.

But the $61 million paid out actually was less dollar-wise than in fiscal 2015. That prior year the Whistleblower Office handed $103 million to whistleblowers.

Still, I'm going with the positive with my By the Numbers selection, which means the 418 awards to whistleblowers is this week's honoree.

Taking care of the backlog: IRS Whistleblower Office director Lee D. Martin also focused on gains in the office's annual report, which was issued on Jan. 12.

"Whistleblowers have helped the IRS detect and deter tax noncompliance and avoidance, helping to protect both the nation's revenue collection and the integrity of our voluntary compliance tax system,” Martin wrote.

"Indeed, since 2007, information submitted by whistleblowers has assisted the IRS in collecting $3.4 billion in revenue, and, in turn, the IRS has approved more than $465 million in monetary awards to whistleblowers," he added.

IRS Whistleblower Program FY16 report

Also good news, noted Martin, is that his office has essentially eliminated the backlog of whistleblower claims that had piled up in recent years, thanks to recommendations from the Government Accountability Office (GAO) and the Treasury Inspector General for Tax Administration.

Martin said that his office "deployed resources from across IRS to help work the inventory backlogs identified" by the GAO in fiscal 2015. "The backlogs have now been fully addressed or eliminated, enabling claims to move further along in the process to be worked appropriately," wrote Martin.

That's good news, since even with a reduced backlog, the Whistleblower Office still has 29,835 open claims under review. To handle those and avoid future backlogs, the office has also instituted a more streamlined process, said Martin in the report.

Mostly satisfied Senator: U.S. Sen. Charles Grassley, who helped write the 1986 provisions increasing whistleblower rewards, also praised the advances the IRS office has made.

"The Whistleblower Office is more welcoming to whistleblowers all the time, and the American public benefits as a result," said Grassley in a statement following the 2016 report's release. "Cracking down on big dollar tax fraud is a matter of fairness to the vast majority of taxpayers who pay what they owe."

Grassley, however, said the office needs to improve the rate at which it considers whistleblower information.

"Whistleblowers often have put their livelihoods on the line to come forward, and they deserve timely answers from the IRS," said Grassley, chairman of the Senate Judiciary Committee.

Trump Administration officials involved: Grassley also noted that he already has spoken to Treasury Secretary nominee Steven Mnuchin about maintaining the momentum at the IRS whistleblower office and building on its progress to date.

Another potential cabinet member in president-elect Donald Trump's administration also was asked about his support for whistleblowers.

During his confirmation hearing for the Attorney General post, Sen. Jeff Sessions (R-Alabama) was asked by Grassley to confirm, on the record, his commitment to encouraging whistleblowers to step forward and to aggressively pursue fraud cases under the False Claims Act (FCA).

Sessions pledged his support for the FCA and its whistleblower reward provisions, calling whistleblower rewards "an effective method of rooting out fraud and abuse."

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