On September 25, 2015 we posted Five- to Seven-Year Turnaround on Whistle-Blower Awards - Get Your Whistles Ready! where we discussed that it can take from five to seven years, or more, for the IRS Whistleblower Office to make a decision about whether to pay an informant for information about individuals or businesses that don't pay all of the tax they owe.
Currently, the whistleblower office is processing roughly 1000 claims a month and it has has helped the IRS collect significant amounts of revenue by facilitating whistleblower claims reporting violations of the tax laws that may otherwise go unidentified.
Now the Treasury Inspector General released a Report dated August 30, 2016 titled "The Whistleblower Program Helps Identify Tax Noncomplicane; However, Improvements Are Needed to Ensure That Claims Are Processed Appropriately and Expeditiously" about the IRS Whistleblower Program.
From Fiscal Year 2011 through February 2016, the IRS collected more than $2 billion because of information provided by whistleblowers. In addition, the Whistleblower Office has recently reduced inventory backlogs.
The report contained some interesting statistical analysis of various processes relating to the workings of the Program including a quote from page 7 of the Report which states that:
A majority of claim closures in FYs 2015 and 2016 (83 and 85 percent, respectively) are rejected or denied before going to an operating division field group for an investigation or examination, with only a small portion (2 percent each year) resulting in an award. Most claims were rejected because the allegations were not specific enough for the IRS to take action or denied because the allegation was below the threshold to justify resources for compliance action.
About 85% of the submissions that the IRS Whistleblower Office receives are pro se filings, and the problem is that often those claims are speculative or are not developed enough for the IRS to use them as a basis for taking action.
Of the remaining 15% on which the IRS does take action and passes the whistleblower’s information to the field agents for examination, approximately 2 out of every 15 are getting an award.
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Figure 4: Closure Reasons for Claims Closed in FYs 2015 and 2016 (*as of February 2016) Closure Reason
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Number of Claims
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FY 2015
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FY 2016*12
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Before Field Group
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8,801 (83%)
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11,045 (85%)
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Rejected: Ineligible Whistleblower
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7
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6
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Rejected: Incomplete Submission
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170
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288
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Rejected: Allegations Unclear/Nonspecific
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5,633
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8,145
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Denied: Below Threshold
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1,116
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1,348
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Denied: Short Statute
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240
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213
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Denied: Statute Expired
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470
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419
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Denied: Lack of Resources
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89
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37
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Denied: Information Already Known
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74
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63
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Denied: Not Selected for Field
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1,002
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526
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After Field Group
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345 (3%)
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675 (5%)
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Denied: Tax Noncompliance Not Found
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287
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534
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Denied: No Collected Proceeds
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58
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141
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Award Paid
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204 (2%)
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322 (2%)
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Other
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1,265 (12%)
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942 (7%)
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Error Creating Claim
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36
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***1***
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Specific Reason Not Listed Above13
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1,229
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***1***
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Total
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10,615
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12,984
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TIGTA made a total of 10 recommendations to improve the whistleblower program, nine of which IRS management agreed to.
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