Leading Whistleblower Attorney Praises IRS Whistleblower Success and Pushes for Further Improvement to Program

The Internal Revenue Service (IRS) recently awarded $74 million to three anonymous whistleblowers from a recovery of $263 million by the agency thanks to their disclosures, displaying the effectiveness of the tax whistleblower program and the need to continue strengthening it.

In response to the major award, leading whistleblower attorney Stephen M. Kohn, a founding partner of Kohn, Kohn & Colapinto, wrote an article for Bloomberg Tax illustrating recent changes that have improved the IRS Whistleblower Program and urging Congress to address reforms.

“Both the size of this award and the reported speed it was issued seem to be a sign that the IRS Whistleblower Office is righting the ship,” writes Kohn, “But there remains a need for congressional reforms to address some of the program’s deep-seated issues that have caused crippling delays and the smaller payouts we are still seeing.”

Kohn praises IRS director John Hinman for implementing new policies, including increasing staff, speeding up process times, and raising payouts to address increasing delays and small payouts.

While these improvements have demonstrated major success with the recent award, he emphasizes that these issues require legislative attention. The IRS Whistleblower Program Improvement Act of 2023, introduced by Senators Chuck Grassley (R-Iowa) and Ron Wyden (D-Ore.), contains six reforms to strengthen the program.

The reforms address imposing interest on delayed awards, removing budget sequestration for awards, ending double taxation of attorney fees, and instituting de novo review in award case appeals. These will ensure the program is as effective as possible for whistleblowers who step forward.

Kohn urges the passing of the bipartisan act to help the program reach its full potential.

He writes, “As it stands today, the IRS whistleblower program is like a car running on fumes. The passage of the act, along with Hinman’s dedication, will turn the stalled program into the race car that every American taxpayer needs it to be.”