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Thursday, May 3, 2012

Sen. Grassley Demands Accounting From IRS Whistleblower Office

Senate LogoSenate Finance Committee Ranking Member Charles Grassley issued this press release today:

Sen. Chuck Grassley of Iowa has asked the IRS and the Treasury Department to answer a detailed series of questions aimed at understanding why the IRS whistleblower office has been so slow in processing cases and making rewards.  Grassley expressed his “extreme disappointment in the management of the program” in a letter to the agency.

“The IRS does not have a problem attracting whistleblowers,” Grassley said.  “The IRS has a problem processing whistleblower information and compensating whistleblowers in a timely manner.  I’m hearing frustration from whistleblowers, and my worst fears are coming true.  The lack of progress is demoralizing whistleblowers, and they might stop coming forward.  That would be a bad outcome for the taxpayers.”

Grassley’s latest inquiry was prompted in part by revelations that the director of the IRS whistleblower program was a panelist at the Offshore Alert Conference at the Ritz-Carlton in Miami Beach.  “It seems the whistleblower office director’s time might be better spent reviewing hundreds of existing cases instead of attending a conference that isn’t directed at potential whistleblowers,” Grassley said.

Grassley wrote to IRS Commissioner Douglas Shulman and Treasury Secretary Timothy Geithner to seek a status update on several benchmarks that would indicate progress in the whistleblower program. The letter is the latest step in Grassley’s oversight of the whistleblower office.

CNBC, IRS Presence at OffshoreAlert Conference Criticized:

We're standing by the pool at the Ritz Carlton in Florida's South Beach, attendees at a financial conference here mingle by the bar and wander through meeting rooms upstairs.

This isn’t just any industry conference — it’s the tenth annual OffshoreAlert gathering, bringing together financial advisors, Cayman Islands and other offshore bankers, and government officials.

“This is the 'Star Wars' bar of off-shore finance,” says one attendee by the pool bar, quoting a description of the event that’s appeared in the press. “Everybody’s here.”

But it was the presence of 19 IRS officials at the conference earlier this week that attracted the attention — and criticism — of Republican Sen. Chuck Grassley of Iowa, ranking member of the Senate Judiciary Committee and a former chairman of the Finance Committee.

While the IRS said the officials were learning the ins and outs of the latest offshore tax avoidance strategies and delivering a message of compliance with U.S. laws, Grassley thought that far too many U.S. government officials to be hanging around this particular Cantina. “There is certainly no reason for 19 IRS employees to attend the conference,” Grassley wrote in a letter to IRS Commissioner Douglas Shulman and Treasury Secretary Tim Geithner Monday. “In a challenging fiscal time, this is not the best use of IRS resources.” ...

The IRS said it did try to minimize costs, saying seven of those attending were based locally and none of the other 12 IRS stayed at the Ritz Carlton — one even bunked with his parents. The others roomed at a nearby Courtyard Marriott.The conference itself was free for speakers — there were five IRS officials scheduled to address the group — but the tax agency says it paid more than $1,300 each in attendance fees for 13 officials, incurring expenses of under $18,000, according to the IRS.

Update: Forbes, Sen. Grassley to IRS: Whistleblower Office Is a Disgrace

http://taxprof.typepad.com/taxprof_blog/2012/05/sen-grassley.html

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Comments

"The IRS said it did try to minimize costs, saying seven of those attending were based locally and none of the other 12 IRS stayed at the Ritz Carlton — one even bunked with his parents."

Let's analyze this statement. The 12 non-locally based IRS agents did not stay at the Ritz Carlton. That means the locally-based agents (who should have had their own local housing) were the ones staying at the Ritz Carlton. In other words, the ones who didn't need to stay at the lavish hotel were the ones who stayed there.

Posted by: George | May 4, 2012 5:57:22 AM

I am the petitioner in the IRC Section 7623(b) whistleblower cases published under consolidated twin dockets at Cooper v. Comm'r, 135 T.C. No. 4 (2010) and 136 T.C. No. 30 (2011). In my opinion, petitioner's two petitions, replies, requests for admissions and motions for reconsideration filed of record in the referenced dockets clearly showed the basis for a multi-million dollar underpayments of estate and generation-skipping tax by a taxpayer (an estate) and that the correct 6 year statute of limitations on such substantial underpayments would not expire until September, 2012. Yet not only has IRS denied the validity of my whistleblower claims (for a widow and her child), it has also, to my knowledge at this date (May 4, 2012), failed and refused to even attempt to collect any of the tax underpayments of many millions at issue in these dockets. My best regards to all who would attempt to advocate for the integrity of IRS and Federal tax laws.

Posted by: William P Cooper | May 4, 2012 7:05:24 AM

Um, no George, that is not what "based locally" means . What it means is that they stayed at either their own home or with a friend in the area.

There is no controversy here. This is the sort of conference we want IRS agents going to, and they did so as cheaply as possible.

Posted by: Bob | May 4, 2012 9:03:25 AM

Is the whistleblower program even generating enough revenue to justify its continued existence?

The honorable Sen. Grassley should ask how many whistleblower claims are processed per person-day to determine how many were not processed.

If the answer is 'less than 1' than perhaps the real savings to the government would be just scrapping the whole whistleblower program and giving the IRS employees the opportunity to work in the private sector. This would allow them the privilege of taking money from private firms in the form of payroll checks; and returning it to the government in the form of payroll taxes, income taxes and personal donations above and beyond what is legally required. In fact, when stated that way, they are being selfish and unpatriotic by *not* working in the private sector. . .

Posted by: anonymous | May 4, 2012 10:42:11 AM