The power individual IRS agents have over the decision to grant whistleblower awards is one of the key “inadequacies” of the IRS’s lackluster whistleblower program, according to Phillips & Cohen attorney Edward Arens.
Writing in Accounting Today, Arens described how IRS agents tasked with uncovering fraud are also in charge of determining whether a whistleblower “substantially contributed” to the investigation and warrant a payout. The problem there, Arens said, is “[h]istorically, agents have not been quick to share credit with whistleblowers.”
The IRS can deny a whistleblower an award if the information received from the tip was “already known.” This means that though many whistleblowers have pointed the IRS to information about fraud they potentially hadn’t yet considered, the IRS has refused to pay a whistleblower award because the agency supposedly already knew the information.
The latest Government Accountability Office audit of the IRS Whistleblower program failed to thoroughly examine this issue, but it does highlight several other major issues holding the program back, including understaffing and inefficient processes.
“The IRS would begin to fulfill the promise of the whistleblower program if it were to follow the GAO’s recommendations,” Arens said. “An important first step would be for the Whistleblower Office to do more to ensure that agents are not recommending denials of whistleblower awards improperly.”