IRS Whistleblower Office FY 2020 Report to Congress highlights the need to have a strong submission presentation.

by | Dec 31, 2020 | Congressional Report | 0 comments

The IRS Whistleblower Office has published its Annual Report to Congress for Fiscal Year 2020.  The annual report reflects back on the fiscal year that ended on September 30, 2020.  During Fiscal Year 2020, the IRS Whistleblower Office endured delays due to COVID-19, but most of the operational processes have been fully restored.  Overall, Fiscal Year 2020 was not a bad year for the program.  And this year’s annual report gives us hope that Fiscal Year 2021 will be even better.  Some of the report highlights are:

  • A Memorandum of Understating was signed putting in place procedures for the IRS and the Alcohol and Tobacco Tax and Trade Bureau to process claims for whistleblower awards under internal revenue laws that are administered and enforced by the Alcohol and Tobacco Tax and Trade Bureau.
  • The staffing in the IRS Whistleblower Office has increased by 6 full-time equivalent positions. The IRS Whistleblower Office added 5 additional Award Recommendation and Coordination positions and 1 Strategic Planning and Program Administration position.
  • The number of awards paid in Fiscal Year 2020 (169 awards) was 93% of the awards paid in Fiscal Year 2019 (181 awards), even though COVID-19 disrupted operations in Fiscal Year 2020. The number of awards paid under section 7623(b) in Fiscal Year 2020 increased from 24 to 30.  This bodes well for the future of the IRS Whistleblower Program now that operations have mostly resumed.

In addition to the positive update on operations of the IRS Whistleblower Office, the annual report makes clear that it is essential to have a strong presentation of the information that a whistleblower is providing to the IRS.  Of the 11,135 claims that were closed in Fiscal Year 2020, 6,240 were closed before ever leaving the IRS Whistleblower Office.  Of these 6,240 claims, 5,074 were rejected because the allegations are not specific, credible, or are speculative in nature.  A full 46% of all claims closed in Fiscal Year 2020 were closed for this reason.  Another 663 claims (4% of all claims that were closed) were rejected before going out to an operating division because they did not involve a tax issue.  Another 969 claims (9% of all claims that were closed) were denied after being surveyed by the operating division.  When a claim is denied after being surveyed by the operating division, the operating division decided not to pursue the information.  This could be for a variety of reasons, including the quality of the information, enforcement priorities, the statute of limitations is too short, and lack of collectability.  While some of reasons that the IRS does not act on a whistleblower’s information are outside of the control of the whistleblower, ensuring that the information provided is complete and in a form that is easily understood and used by the IRS is something that is in the control of the whistleblower.  As such, anyone that is seriously considering providing information to the IRS should consult with an attorney prior to the submission of information.

We wish everyone a happy and healthy 2021!

Lynam Knott