The National Whistleblowers Center (NWC) has filed an amicus curiae (“friend of the court”) brief in a precedent-setting whistleblower tax case pending before the U.S. Tax Court. The case, Insinga v. Commissioner of Internal Revenue, alleged that the IRS delay in ruling on whistleblower reward cases was tantamount to a denial of claims.
The NWC is asking the Court to apply the Administrative Procedure Act to tax whistleblower cases. This Act permits the Court to find that the IRS has “unreasonably delayed” ruling on whistleblower cases and to order the IRS to commence issuing rulings on the large backlog of whistleblower cases.
The NWC called to the Court’s attention the importance of new guidance issued by the IRS Deputy Commissioner Stephen Miller, setting forth a 90-day deadline for issuing whistleblower reward determinations after the IRS collects proceeds based on the whistleblower’s information.
Mr. Dean Zerbe, who co-authored the amicus brief pro bono on behalf of the National Whistleblowers Center, said: “It’s vital that the Court make clear that the IRS cannot benefit from information provided by a whistleblower and then fail to provide a timely award. The IRS cannot be allowed to ‘dine and dash.’” Mr. Zerbe was senior counsel on the Senate Finance Committee and played a critical role in Congress’s development of the IRS Whistleblower law.
Stephen Kohn, Executive Director of the NWC and another co-author of the amicus, said:
We hope that the Tax Court will step up to protect the whistleblowers who make the difficult decision to come forward. It will be a great step forward for all whistleblowers if the Tax Court directs the IRS to issue a final ruling for Mr. Insinga in a timely manner. The NWC is very concerned that unreasonable delay in rewarding whistleblowers is dampening the willingness of employees to risk their jobs and careers to report tax fraud. All honest taxpayers will benefit from a successful whistleblower program that holds large tax cheats accountable.