New legal protections meant to shield employees from retaliation for letting the IRS know their companies aren’t tax compliant should help whistleblower awards and revenue collections rebound from a dropoff recorded by the agency in the 2019 federal fiscal year, said Matthew Stock, director of the whistleblower rewards practice at Zuckerman Law. He also expects a lift from a new requirement for the IRS whistleblower office to provide updates to claimants.
The IRS issued only $120 million in whistleblower awards in 2019 compared to $312 million in 2018, and collections fell to $617 million from $1.4 billion over the same period. Stock pinned the declines on various factors, including a backlog that likely expanded during the federal government shutdown of a year ago and fewer employees with more work due to years of IRS budget cuts. He also pointed a finger at the 10 years on average it took for those 2019 awards to get handed out, up from seven years in 2018. But the retaliation protections and reporting requirements, both of which were written into last year’s Taxpayer First Act (H.R. 1957 (116)), should help the pendulum swing back, Stock said. “If more whistleblowers see that more tips are being acted on, and acted on more quickly, plus with better protection in place, I think the IRS will start getting better tips,” he said.
To learn more about the Taxpayer First Act whistleblower protection provision, see our article Whistleblower protections for accountants and tax professionals bolstered by new law.
To discuss potential representation in a tax fraud whistleblower reward case with amounts in dispute in excess of $2 million, click here or contact the Director of our IRS whistleblower practice, Matthew Stock, at [email protected] or (202) 930-5901 for a free confidential consultation. Matthew Stock, an attorney, Certified Public Accountant (CPA) and Certified Fraud Examiner (CFE), is routinely quoted in the media about whistleblower rewards programs.