IRS Whistleblower Program and Confidentiality of IRS Investigations of Whistleblower Claims

One of the most interesting and challenging issues in representing IRS whistleblowers is how this promising new IRS Whistleblower Program can co-exist with the limits Congress has imposed on disclosure of taxpayer information–which includes what the IRS does in pursuing claims brought by whistleblowers.

I wanted to pass along that Michelle M. Kwon, Assistant Professor of Law at Texas Tech Law School, has written a law review article about this subject. It discusses recommendations for allowing information to be shared more with whistleblowers by “relaxing” the restrictions of section 6103, “Confidentiality and disclosure of returns and return information.”

As Professor Kwon writes:

There is a tension between protecting taxpayer privacy and effectively administering the enhanced IRS whistleblower program. Section 6103 generally would prohibit the IRS from disclosing to the whistleblower the status of the whistleblower’s claim, including whether the taxpayer is, has been, or will be under audit as a result of the whistleblower’s information, why a claim is rejected or denied, or the basis of any eventual award. Furthermore, when Congress enhanced the whistleblower law in 2006, it contemplated that the IRS may seek additional assistance from the whistleblower, presumably to help build a case against the delinquent taxpayer. The ability of the whistleblower to assist the IRS may be hampered, however, to the extent that Section 6103 prohibits the IRS from sharing confidential tax information with the whistleblower. Finally, the new law gives whistleblowers the right to appeal IRS award determinations to the Tax Court. But there are questions about how meaningful that appeal right can be given the restrictions imposed by Section 6103.

Issues concerning how section 6103 will impact IRS whistleblowers are among those to be addressed at the 2010 IRS Whistleblower Boot Camp, which will build on the successes of last year’s inaugural IRS Whistleblower Boot Camp.