IRS Whistleblower Program Releases Annual Report

On June 24, 2024, the Internal Revenue Service (IRS) Office of the Whistleblower issued its Annual Report covering collections and awards for FY 2023.

Among the key findings are:

• Whistleblowers paid $88.7 million on $337.9 million in collections
• New whistleblower cases filed: 6455
• Total backlog of cases: 30,135
• Backlog in cases evaluating whistleblower award qualification/amount: 4021
• Time Taken to Process Mandatory Awards (from claim filed to award paid): 11.29 years
• Amount of collections attributed to whistleblowers in the “backlog”: “Several billion dollars”
• Amount of taxes collected since the program initiated in 2007: $6.9 billion, plus additional billions attributed to whistleblowers but still being processed
• Amount of payments to whistleblowers since the mandatory program initiated in 2007: $1.2 billion.

According to the report, the IRS continues to receive “tremendous assistance” from both whistleblowers and the “practitioner community.” Whistleblower disclosures play an

“Important component of effective tax administration,” “bolster(ing) the fair and effective enforcement of our nation’s tax laws, the success of our voluntary tax system, and our efforts to reduce the tax gap.”

“The whistleblower community welcomes the new Director of the Whistleblower Office John Hinman’s efforts to “transform” the program by adding staff and improving management systems,” said Stephen M. Kohn, Chairman of National Whistleblower Center and founding partner at the whistleblower law firm of Kohn, Kohn and Colapinto.

“However, Congress needs to immediately pass the bipartisan IRS Whistleblower Improvement Act, a bill that is necessary to make the program work,” Kohn continued. “The good faith and hard work of the professionals who staff the Whistleblower Office can only go so far in improving the unacceptable backlog. Congress needs to fix the laws that have stifled whistleblowers and undercut the tremendous potential of the Office.”

“The fact that it takes an average of 11.26 years to process the payment of a mandatory whistleblower award, combined with the Office’s acknowledgment that there is a backlog of over 30,000 cases, speaks for itself. Legislative reforms are needed, and the bipartisan IRS Whistleblower Improvement Act should be an immediate priority within the Congress,” Kohn added.

Dean Zerbe, a senior advisor at the National Whistleblower Center and a partner at the tax whistleblower firm of Zerbe, Miller, Fingeret, Frank & Jadav said: “The good news from this report for whistleblowers is the big increase in awards – $88 million up from the previous year of $37.8 million. And the good news for honest taxpayers – the whistleblower program brought in $338 million in revenue. Congratulations to Director John Hinman and his team for these good results.”

“The report highlights the reform efforts of the IRS to encourage and identify better whistleblower submissions – actionable submissions,” Zerbe added. “The IRS is clearly interested in hearing from whistleblowers with detailed information about significant, recent, and current tax evasion regarding high-wealth individuals, complicated partnerships, overseas accounts, and large businesses.”