In an article for Bloomberg BNA’s Tax Management Memorandum, Phillips & Cohen attorney Edward Arens stressed the importance of recognizing the valuable contributions of whistleblowers to the Internal Revenue Service’s enforcement programs. The article Giving Credit Where Credit is Due: Requiring the IRS to Properly Attribute its Recoveries to Whistleblowers, Mr. Arens underscores the need for rewards to encourage whistleblowers:
The IRS has denied awards to thousands of whistleblowers who identiﬁed issues for which the IRS collected proceeds, often on questionable grounds. Many of the denials may be the result of the IRS’s interpretation of the statute, which imposes an improperly high standard on whether IRS actions were ‘‘based on’’ whistleblower information. Other denials are likely the result of IRS procedures that hinder its use of whistleblower information. Because of how the IRS has interpreted and implemented the law, many whistleblowers may [be eligible] yet not received awards.
Failing to pay awards undermines the 2006 amendments and jeopardizes the IRS’s remaining currency with whistleblowers, who are unlikely to come forward if the IRS fails to credit them for accurate and timely information. To avoid that outcome, the IRS should apply the amendments broadly to credit whistleblowers who contribute to its recoveries.
Read the full article on Bloomberg BNA‘s website