IRS Whistleblower Program Continues to Lag Behind

On July 1, the Internal Revenue Service (IRS) Whistleblower Office released its Annual Report to Congress for the 2022 Fiscal Year (FY 2022). In recent years, the IRS Whistleblower Program has been plagued by a number of issues and the statistics for FY 2022 show that the program continues to lag behind other similar whistleblower award programs.

According to the report, the IRS paid out $37.8 million in whistleblower awards during FY 2022. The 132 awards stemmed from cases where the IRS collected a total of $172.7 million. In comparison, during FY 2022, the Securities and Exchange Commission (SEC) Whistleblower Program paid out 103 whistleblower awards totaling $229 million and qui tam whistleblowers received $448 million under the False Claims Act.

“The IRS whistleblower program continues to lag behind other similar programs in the amount of awards to whistleblowers,” said leading whistleblower attorney Stephen M. Kohn of Kohn, Kohn & Colapinto. “We hope that increases in budget and the new leadership in the office will turn this around for FY 2023.”

“Every penny that a tax cheat does not pay means additional burdens on the middle class,” added Kohn, author of the recently released Rules for Whistleblowers: A Handbook for Doing What’s Right. “This is unfair and our government needs whistleblowers to be incentivized to put an end to these frauds.”

Among the issues undermining the success of the IRS Whistleblower Program is the massive delays in processing times. According to the report, the average processing time for a whistleblower award claim continued to rise and is over 11 years.

Kohn and other whistleblower advocates are calling for the passage of the bipartisan IRS Whistleblower Program Improvement Act. Introduced by Senators Chuck Grassley (R-IA) and Ron Wyden (D-OR), the bill addresses a number of loopholes undermining the IRS program.