Tips on Making a Credible IRS Whistleblower Claim

The National Whistleblower Center’s Senior Policy Analyst Dean Zerbe was on a recent panel in Miami with Lee Martin, Director of the IRS Whistleblower Office – that provided whistleblowers a useful guide on the good and the bad in terms of filing a successful tax whistleblower complaint with the IRS. 

Zerbe was quoted in the May 16, 2016 TaxNotes article “News Analysis: Be Nice to Whistleblowers,” by Lee Sheppard who covered the panel which was part of the OffshoreAlert Conference held May 1.

Zerbe and other panelist discussed the importance of putting together a credible claim for the IRS. Here is an excerpt from the article:

To make a credible claim, whistleblowers and their lawyers have to do a lot of work for the IRS, then boil it all down into a presentation that can be quickly understood, Zerbe and Skarlatos explained. The IRS wants current cases, not old, stale cases on which the statute had run. The IRS likes documents.

“You have to have documents. That’s going to make a much stronger case. But don’t go stealing documents. The documents have to be usable,” said Skarlatos. “The more particulars, the more facts, the better. If you want it to catch fire, you gotta make the IRS’s job easy. Do the work for them,” he said. “The more it’s on a silver platter, the better,” Zerbe echoed.

Zerbe advised stating the case in a memo of 8-10 pages and then adding relevant exhibits. Skarlatos advised against massive memos. “Make it interesting. Make it compelling,” said Skarlatos, advising that the whistleblower should understand the taxpayer’s defenses. Both advised against holding back important information, which seems to be a constant problem for whistleblowers.

It is difficult to resurrect a claim the IRS has rejected. Martin advised against resubmitting the same information. The IRS has to have a reason to want to debrief the whistleblower and to have a dialogue. Zerbe noted that it is hard for a whistleblower to anticipate IRS questions. Reeves advised whistleblowers to give up as much information as possible upfront and not to hold back documents. “You gotta put your best party dress on,” said Zerbe.

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