Yesterday, the U.S. Internal Revenue Service (“IRS”) Office of the Whistleblower released its Annual Report to Congress on the IRS Whistleblower Program for the fiscal year 2019. The IRS Whistleblower Program recovered over $616 million of taxpayer money and awarded over $120 million to whistleblowers. This amount includes $110 million of proceeds collected as a result of IRC § 7623(c), collected for criminal fines, civil forfeitures, and violations of reporting requirements. One hundred eighty-one (181) tax whistleblowers received awards in 2019.
The report also noted statutory changes that resulted in operational changes for the IRS Whistleblower Office. These came due to the passage of Section 41108 of the Bipartisan Budget Act of 2018 (BBA 2018), effective July 1, 2019, and the Taxpayer First Act of 2019 (TFA 2019). The TFA 2019 added, to IRC § 7623, several important provisions that would help improve taxpayer service, ensure the continual enforcement of the tax laws fairly and impartially, and ultimately support the continued success of our nation.
According to the report:
- In 2019 whistleblowers received over $120.3 million in awards.
- Since the inception of the program in 2007, whistleblower disclosures have resulted in recoveries of more than $5.7 billion, and the total amount of rewards paid is over $931.7 million.
- Twenty-five thousand three hundred fourteen (25,314) open whistleblower claims are pending in the office, which has 37 full-time employees.
- The average time to process Awards is 10.31 years.
- There were 282 claims submitted by whistleblowers from foreign regions.
- Tax fraud allegations lacking specific and credible information caused the IRS Whistleblower Office to reject 51% of whistleblower claims submitted.
The report demonstrates the effectiveness of qui tam laws and the IRS Whistleblower Program. In three short years, the taxpayers have recovered over $2.24 billion from tax fraudsters based on information provided by whistleblowers.
The IRS Whistleblower Program, as discussed in the report, continues to build on the significant contributions of whistleblowers like Bradley Birkenfeld, the first major international tax fraud whistleblower. Mr. Birkenfeld’s disclosures resulted in $780 million fine against UBS and triggered a successful law enforcement campaign that effectively ended illegal offshore banking for U.S. taxpayers in Switzerland.