On April 18, Siri Nelson, the Executive Director of National Whistleblower Center (NWC), wrote a letter to Senators Chuck Grassley (R-IA) and Ron Wyden (D-OR) expressing concerns regarding unneeded delays in whistleblower award payments under the Internal Revenue Service (IRS) Whistleblower Program. In particular, NWC raises issues with the IRS’s rule on partial awards/multiple actions, explaining that it “has been a source of enormous frustration for tax whistleblowers – resulting in many whistleblowers who have provided valuable information to the IRS having to unnecessarily wait years and years for an award.”
This rule, created by the Internal Revenue Manual (IRM), requires final determinations of all actions before an award can be issued. According to NWC, it has become a disincentive for whistleblowers to come forward and conflicts with the policy goals laid out when Congress amended the IRS whistleblower program in 2006. Despite the IRM providing exceptions for the “best interest” of the IRS and to the extent “necessary to efficiently administer the program,” the IRS has not provided guidance for exercising this exception authority.
In the letter, NWC expresses its appreciation for Grassley and Wyden’s joint support for tax whistleblowers. On April 16th, Grassley pointed out the issue of delayed whistleblower awards due to the IRS policy on partial awards/multiple actions when questioning IRS Commissioner Daniel Werfel during the Finance Committee hearing. Wyden then asked a follow-up question expressing his desire to contribute to these whistleblower matters. Commissioner Werfel responded that he would review the rule on partial awards/multiple actions and follow up with a complete answer to Senator Grassley’s question.
Ensuring issuance of awards is critical to the success of the IRS Whistleblower Program, which Congress has long recognized and was the reason it created a mandatory award program in 2006 and established the IRS Whistleblower Office.
NWC emphasizes that “Nothing encourages whistleblowers to come forward than seeing other whistleblowers receiving awards” and calls for a common sense answer of issuing awards from the IRS and the IRS Whistleblower Office (WBO) as soon as possible.
“My years of representing whistleblowers has made one thing clear – if an agency wants a successful whistleblower program – the agency must make awards and the agency has to make those awards timely,” says NWC Chairman Stephen M. Kohn. “Ending this nonsensical rule which is delaying awards by years is an easy win for the IRS whistleblower program. Whistleblowers should be rewarded as quickly as possible – not subject to artificial time delays created by the agency.”
NWC is also advocating for the passage of the IRS Whistleblower Program Improvement Act, which offers a number of technical reforms to the IRS Whistleblower Program. In March, NWC sent a letter to Senator Mike Crapo (R-ID) Ranking Member of the Senate Finance Committee urging him to support the inclusion of the whistleblower reform bill as a part of the Tax Relief for American Families and Workers Act of 2024, the large bipartisan tax bill currently being negotiated in Congress.
NWC has published an Action Alert allowing whistleblower supporters to write to Congress calling for the passage of the IRS Whistleblower Improvement Act.
Join NWC in Taking Action:
Further Reading:
Bipartisan Bill Offers Critically-Needed Reforms to IRS Whistleblower Program