Delays, Red Tape for Whistleblower Payments

A law passed by Congress to give whistleblowers up to 30 percent of taxes recouped from corporate tax dodgers has been hampered by delays and red tape. An audit by the Government Accountability Office also found that corporations under investigation for tax fraud can invoke rights that add years to the process, The Washington Post’s blog the Federal Eye reported.

The program was championed by Sen. Charles Grassley, R-Iowa, and was designed to go after fraud of at least $2 million. Since the law was passed, the IRS has received tips on more than 9,500 taxpayers from 1,400 whistleblowers. Some 1,300 claims have been rejected, the Post reported.

“Silence between the IRS and the whistleblowers only helps the tax cheats,” Grassley said in a statement according to the Post. “I’m concerned that the IRS management still might have too many opportunities to say ‘no’ to a whistleblower, even when the whistleblower office believes a claim has merit.”

The GAO reported that whistleblower claims take years to go through the tax agency’s review and award process. Rejection letters the IRS sends to whistleblowers do not state why their requests for awards were denied. The National Whistleblowers Center’s Dean Zerbe said, “The IRS will do a better job of going after tax cheats if good whistleblower claims are given open and full consideration — and not subject to a rubber stamp denial,” the Post reported.