Paul L. Caron
Dean


Tuesday, December 1, 2015

GAO: IRS Has Awarded $315 Million To Whistleblowers, But Problems Plague Program

GAO LogoGovernment Accountability Office, IRS Whistleblower Program: Billions Collected, but Timeliness and Communication Concerns May Discourage Whistleblowers (GAO-16-20):

The Internal Revenue Service (IRS) Whistleblower Office (WO) is responsible for processing thousands of tax whistleblower claims annually for two related whistleblower programs: for claims of $2 million or less, the 7623(a) program, and for claims over $2 million, the 7623(b) program. The whistleblower claim review process takes several years to complete, and GAO found that the WO is not using available capabilities to track and monitor key dates in its claim management system. Without available information on key dates related to award review and payments, the WO is unable to assess its performance against timeliness targets and risks unnecessarily delaying award payments.

Between fiscal year 2011 and June 30, 2015, the WO awarded over $315 million to whistleblowers—the bulk of which was for the 7623(b) claims, which were first paid in fiscal year 2011, 4 years after the program started. In a review of the 17 paid 7623(b) award claim files, GAO found that the WO made errors in determining some awards, resulting in over- and underpayments totaling approximately $100,000. In response to errors, IRS began corrective actions, including ensuring total collected proceeds are verified before making award payments. However, the WO has not documented this new procedure, putting it at risk of making additional errors in award payments.

GAO

The WO's communication with stakeholders, including whistleblowers, is limited due to delayed annual reports to Congress, incomplete data, and limited program information for whistleblowers. Delays in issuing the annual reports have resulted in last minute revisions that introduced discrepancies and inconsistent reporting periods that preclude year-over-year comparisons. The WO is addressing some data gaps and has published two fact sheets to provide more information to the whistleblower community; however, the fact sheets do not include information on key aspects of the program, such as time ranges for steps in the review process. Until changes are made to the annual report and fact sheets, the utility of these publications is limited.

IRS and the WO take steps to protect whistleblowers and the information they submit, but GAO found gaps in IRS and WO procedures. For example, the WO did not have documented controls in place for sending mail, and at least once sent sensitive mail to an incorrect address that also had a return address indicating the letter was from the WO. This potentially compromised the identities of whistleblowers. The WO has said it has since changed how they label return addresses, but has not documented this policy. Further, tax whistleblowers do not have statutory protections against retaliation from employers. IRS and the whistleblower community support such protections, noting that inadequate protections may discourage whistleblowers from coming forward.

https://taxprof.typepad.com/taxprof_blog/2015/12/gao-irs-has-awarded-315-million-to-whistleblowers-but-problems-plague-program-.html

Gov't Reports, Tax | Permalink

Comments

One of the worst things about IRS administration of the program is that they tell as little as possible to the whistleblower about what is going on. They tried a "pilot study" to send an annual letter to whistleblowers whose claims have been open 3 years or more letting them know the IRS is still pursuing it, but they complain the letters--- which are not individualized--- are too costly:
"According to WO officials, the WO’s initial assessment of the program shows that it has taken 100 staff hours to send pilot letters to approximately 180 whistleblowers updating them on approximately 360 open claims. WO officials stated that a significant portion of the time spent on the pilot program was spent confirming data in E-TRAK. WO staff researched each whistleblower claim in the pilot to confirm the status and the mailing address of the whistleblower."

Posted by: Eric Rasmusen | Dec 2, 2015 6:13:27 PM