The U.S. Government Accountability Office recently released a report indicating the Internal Revenue Service's federal-tax whistleblower program needs significant improvements. Congress enacted the tax whistleblower program in 2006 for cases involving tax evasion of over $2 million. The GAO report suggests that the IRS' program is inefficient, slow and difficult for citizens to navigate.
Tax evasion accusations are fairly common in California and throughout the country. Although most tax evasion cases do not involve the large sums covered by the whistleblower program, being accused of tax evasion by the IRS can be a highly daunting situation, especially for California businessmen and professionals.
IRS Deputy Commission Steven Miller said that the GAO's report does have some valid points but noted that legal privacy requirements and taxpayer protections add to the bulk of the delay associated with the program.
A senator who sponsored an expansion of the whistleblower program said that the GAO report proved that the IRS has had some successes in catching big-dollar tax evasion through the program but added, "I'm concerned that the IRS management might have too many opportunities to say 'no' to a whistleblower, even when the whistleblower office believes a claim has merit."
According to the GAO report the whistleblower cases a long time to complete and many languish for several years. The IRS has rejected 1,300 of the total claims and 245 claims seem to be near completion. One man was awarded $4.5 million by exposing a tax evader, whereas other claims involve up to $98.6 billion in unpaid taxes.
Source: Wall Street Journal, "IRS Whistleblower Program Faulted," Laura Saunders, Sept. 10, 2011