As has been reported today in Tax Notes and CCH, my colleague Richard Rubin and I addressed the IRS at its hearing yesterday on the proposed IRS Whistleblower rules. We were able to speak for roughly one-third of the hearing.
We focused on fundamentals. We urged that Treasury and the IRS must stay true to the intent of Congress to expand the number and types of IRS whistleblower claims that the IRS receives and pursues, and that merit awards to whistleblowers.
I argued that, from the outside, it appears that the intent of Congress has not yet been realized. Instead, major rules and policies proposed to date are in many ways more restrictive than those under the “old” program, which cannot be the result Congress intended.
Those restrictions and policies also create needless obstacles–such as a proposed two year delay that did not exist under the “old” system–that will discourage IRS whistleblower claims. The public will suffer as a result, becuase many unlawful tax schemes will go undetected without whistleblowers exposing them.
We argued for a straightforward rule that fulfills Congress’s intent that any whistleblower claims providing a financial benefit to the Treasury should merit a whistleblower reward. Predictability of rewards is essential to attracting whistleblowers, especially those with information about the largest and most complex tax schemes.