IRS Tax Whistleblower Procedures Continue to Take Shape

The new IRS Whistleblower Office’s Rewards Program that we have followed closely on this whistleblower lawyer blog made further progress this week. The IRS gave notice on January 9 that it intends to create a proposed new system of records–“Whistleblower Office Records.”

The purpose is to allow the new IRS Whistleblower Office to administer the IRS Whistleblower program more effectively, in contrast to the “old,” decentralized procedures that the IRS used before Congress authorized the new IRS Whistleblower Rewards in December 2006.

The new Whistleblower Office Records will contain records pertaining to whistleblower award applications that were filed before or after the new Whistleblower Office was created in early 2007. Based on my earliest discussions with IRS Whistleblower Office Director Stephen Whitlock, it is an essential step to bring all whistleblower submissions to the same place so that the Whistleblower Office can administer the program effectively.

We congratulate Mr. Whitlock and the Whistleblower Office on their continued efforts and progress to make the Whistleblower Program as effective as it can be.

The Notice is “Whistleblower Office Records — Treasury/IRS 42.005,” 73 F.R. 1667-1669. It is reprinted below:

[Federal Register: January 9, 2008 (Volume 73, Number 6)]
[Notices]
[Page 1667-1669]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09ja08-88]

=======================================================================
———————————————————————–

DEPARTMENT OF THE TREASURY
Internal Revenue Service

Privacy Act of 1974, as Amended
AGENCY: Internal Revenue Service, Treasury.

ACTION: Notice of Proposed New Privacy Act System of Records.

———————————————————————–

SUMMARY: In accordance with the requirements of the Privacy Act of
1974, as amended, 5 U.S.C. 552a, the Department of the Treasury,
Internal Revenue Service, gives notice of a proposed new system of
records entitled “Whistleblower Office Records–Treasury/IRS 42.005.”

DATES: Comments must be received no later than February 8, 2008. This
new system of records will be effective February 19, 2008 unless the
IRS receives comments that would result in a contrary determination.

ADDRESSES: Comments should be sent to the Director, Whistleblower
Office, SE:WO, Internal Revenue Service, 1111 Constitution Avenue, NW.,
Washington, DC 20224. Comments will be available for inspection and
copying in the Freedom of Information Reading Room (Room 1621), at the
above address. The telephone number for the Reading Room is (202) 622-
5164.

FOR FURTHER INFORMATION CONTACT: Director, Whistleblower Office, SE:WO,

[[Page 1668]]

Internal Revenue Service, 1111 Constitution Avenue, NW., Washington, DC
20224.

SUPPLEMENTARY INFORMATION: The proposed system will allow the IRS to
maintain records pertinent to determining claimants’ eligibility for
and amount of awards pursuant to 26 U.S.C. 7623. The Whistleblower
Office was created by section 406 of the Tax Relief and Health Care Act
of 2006. Prior to its amendment by Section 406, 26 U.S.C. 7623
authorized the IRS to pay awards to claimants who provided information
that led to the collection of taxes. The IRS maintained a decentralized
procedure for processing requests for such awards. Section 406 amended
26 U.S.C. 7623 to establish criteria for the payment of certain awards,
and to provide a judicial remedy in the U.S. Tax Court for review of
these award determinations. Section 406 of the Act amends section 7623
of the Internal Revenue Code concerning the payment of awards to
certain claimants denominated as “whistleblowers.” New section
7623(b) provides an award floor based on information regarding tax law
violations provided by these claimants. Claimants are eligible for
section 7623(b) awards based on the amount collected as a result of any
administrative or judicial actions resulting from the information
provided.
The Whistleblower Office has responsibility for the administration
of a whistleblower program, and the Secretary is required to provide an
annual report to Congress on the use of section 7623. Records
pertaining to award applications filed prior to the creation of the
Whistleblower Office, for which an award has not yet been determined,
will also be maintained in this system of records. An exemption rule is
being published separately under the rules section of the Federal
Register.
The report of a new system of records, as required by 5 U.S.C.
552a(r) of the Privacy Act, has been submitted to the Committee on
Government Reform of the House of Representatives, the Committee on
Homeland Security and Governmental Affairs of the Senate, and the
Office of Management and Budget, pursuant to Appendix I to OMB Circular
A-130, “Federal Agency Responsibilities for Maintaining Records About
Individuals,” dated November 30, 2000.
The proposed new system of records entitled “Treasury/IRS 42.005–
Whistleblower Office Records” is published in its entirety below.

Dated: December 21, 2007.
Peter B. McCarthy,
Assistant Secretary for Management and Chief Financial Officer.
TREASURY/IRS 42.005
SYSTEM NAME:
Whistleblower Office Records.

SYSTEM LOCATION:
Whistleblower Office, Washington, DC, and Ogden Campus, Ogden,
Utah.

CATEGORIES OF INDIVIDUALS COVERED BY THE SYSTEM:
These records include information about individuals who submit
allegations of possible tax noncompliance and claims for award to the
Whistleblower Office (“claimants”), claimants’ representatives, and
the taxpayers and third parties about whom the information is received,
which is pertinent to a claim for award.

CATEGORIES OF RECORDS IN THE SYSTEM:
These records include claimant identity information, allegation
information received, claims for award (including supporting
information or documentation), information pertaining to any civil or
criminal investigation initiated, or expanded, as a result of the
allegations received by the Whistleblower Office, any other information
pertinent to the Whistleblower Office’s determination as to the amount,
if any, of any award for which the claimant may be eligible under 26
U.S.C. 7623, including information pertaining to appeals of award
determinations to the Tax Court (including the results of such
appeals).

AUTHORITY FOR MAINTENANCE OF THE SYSTEM:
26 U.S.C. 7623 and 7801, and 5 U.S.C. 301.

PURPOSE(S):
The records in this system will be used to administer the claimant
award program under 26 U.S.C. 7623.

ROUTINE USES OF RECORDS MAINTAINED IN THE SYSTEM INCLUDING CATEGORIES
OF USERS AND PURPOSES OF SUCH USES:
Disclosure of returns and return information may be made only as
provided by 26 U.S.C. 6103. To the extent authorized by 26 U.S.C. 6103,
disclosure may also be made to appropriate agencies, entities, and
persons when (1) the Department suspects or has confirmed that the
security or confidentiality of information in the system of records has
been compromised; (2) the Department has determined that as a result of
the suspected or confirmed compromise there is a risk of harm to
economic or property interests, identity theft or fraud, or harm to the
security or integrity of this system or other systems or programs
(whether maintained by the Department or another agency or entity) that
rely upon the compromised information; and (3) the disclosure made to
such agencies, entities, and persons is reasonably necessary to assist
in connection with the Department’s efforts to respond to the suspected
or confirmed compromise and prevent, minimize, or remedy such harm.

POLICIES AND PRACTICES FOR STORING, RETRIEVING, ACCESSING, RETAINING
AND DISPOSING OF RECORDS IN THE SYSTEM:
STORAGE:
Paper records and electronic media.

RETRIEVABILITY:
Data is retrieved by the name or taxpayer identification number of
the claimant(s), of the taxpayer(s) who are the subject(s) of the
allegation(s), or of third parties identified in the records; the name
or Centralized Authorization File (CAF) number of the claimant’s
representative; or an award claim number assigned by the Whistleblower
Office.

SAFEGUARDS:
Only persons authorized by law will have access to these records.
Access controls are not less than those published in IRM 10.8.1,
Information Technology (IT) Security Policy and Standards and IRM 1.16,
Physical Security Program.

RETENTION AND DISPOSAL:
Records are maintained in accordance with IRM 1.15.23, Records
Control Schedule for Tax Administration–Examination; Item 13, Reward
Claim Cases.

SYSTEM MANAGER(S) AND ADDRESS:
Director, Whistleblower Office, SE:WO, 1111 Constitution Avenue,
NW., Washington, DC 20224.

NOTIFICATION PROCEDURE:
This system may not be accessed for purposes of determining whether
the system contains a record pertaining to a particular individual; the
records are exempt under 5 U.S.C. 552a(k)(2).

RECORDS ACCESS PROCEDURES:
This system may not be accessed for purposes of inspection or to
contest the content of records; the records are exempt under 5 U.S.C.
552a(k)(2).

CONTESTING RECORDS PROCEDURES:
26 U.S.C. 7852(e) prohibits Privacy Act amendment of tax records.

[[Page 1669]]

RECORDS SOURCE CATEGORIES:
Claimants and their representatives; Department of the Treasury
employees and records; newspapers, court records, and other publicly
available information.

EXEMPTIONS CLAIMED FOR THE SYSTEM:
This system has been designated as exempt from sections (c)(3),
(d)(1)-(4), (e)(1), (e)(4)(G)-(I), and (f) of the Privacy Act pursuant
to 5 U.S.C. 552a(k)(2). See 31 CFR 1.36.

[FR Doc. E8-129 Filed 1-8-08; 8:45 am]
BILLING CODE 4830-01-P