Award Winning Attorneys
SEC Whistleblower Program
News & Insights
Both in our practice and on our blog, we typically focus on the SEC Whistleblower Program, which seeks actionable intelligence about possible violations of the federal securities laws. But, the SEC Whistleblower Program is only one of several federal programs that seek to leverage whistleblower information to detect and deter wrongdoing. One of the other prominent whistleblower programs is the IRS Whistleblower Program, which was revamped in 2006 to better incentivize individuals with information about possible tax evasion to report that misconduct. Under the program, whistleblowers may be eligible to collect a monetary award if they provide information that “substantially contributes” to the collection of taxes, penalties or other amounts in excess of $2 million.
While the IRS Whistleblower Program has had some notable successes, taxpayer advocates – including, most significantly, Senator Chuck Grassley (R-IA) – are calling for the IRS to do even more to encourage whistleblowers to come forward and help stop tax fraud. Senator Grassley urged the IRS to move more quickly to investigate and resolve cases based on whistleblower tips, stating “The agency should do everything it can to make these cases a priority.” Senator Grassley’s remarks were echoed in an article by Forbes contributor Erika Kelton, who called for a shift in culture at the IRS.
These remarks come on the heels of the IRS’s latest report to Congress on the status of the whistleblower program, which revealed that the IRS did not make its first award under the updated 2006 program rules until 2011 – a five year gap. The SEC Whistleblower Program, by contrast, made its first award just a year after the rules of the program became final. Moreover, the IRS acknowledged that there are limitations to its current program, including the fact that IRS whistleblowers (unlike SEC whistleblowers) are not accorded specific protection from retaliation under the statute that amended the IRS Whistleblower Program rules.
We agree with Senator Grassley that “supporters of whistleblowers need to stand firm. We can’t let up.” Given the enormous potential of whistleblowers to assist the IRS (and other government agencies), we hope the IRS will heed Senator Grassley’s call and devote additional resources to ensuring that whistleblower complaints are handled quickly, effectively and successfully.