The Washington Post is running a story today by David Hilzenrath on page A11 called, "Change in IRS rules could block rewards for whistleblowers." 
The story focuses on a manual by the Internal Revenue Service (IRS) called the Internal Revenue Manual (IRM). The new IRM recognizes that if a whistleblower provides information leading to a payment to the IRS, the whistleblower would be entitled to a reward of up to 30%. However, the revised IRM adds that if the information reduces a credit or stops a refund, then no reward is made. It also bars rewards arising from criminal penalties. My friend Michael Sullivan of Atlanta told Hilzenrath, "There’s apparently an institutional resistance to rewarding whistleblowers that will take some time to dissipate." UBS whistleblower Bradley Birkenfeld (pictured) provided information the led to the bank’s $780 million settlement with the IRS. His whistleblower claim with the IRS is pending while he serves a prison sentence for having followed the bank’s orders in connection with the tax evasion scheme he revealed. Hilzenrath’s story reports that Sen. Charles Grassley has written to the Treasury Department asking that it delay the IRM revision. Sen. Grassley was a proponent of the IRS whistleblower reward program. Hilzenrath quotes a former IRS official saying that the reward program is "unseemly." Perhaps when the IRS whistleblower program starts to bring in as much money as the False Claims Act does, then attitudes will change and the government will see the wisdom in promoting rewards as a way to increase revenue. You can support Birkenfeld’s campaign for clemency by following this link.
