Jesse Eisinger just did a piece today in the New York Times about how we might soon be seeing an increase in the enforcement of our tax laws after an eight year decline in audit and prosecution of tax cases by the IRS. To recap: Congress has been cutting the IRS’s budget for almost a decade straight now, and without a sufficient budget you don’t have people at the IRS to enforce our country’s tax laws. Without enforcement, the IRS makes fewer cases against noncompliant taxpayers, and there is little incentive for taxpayers to follow the rules when (and if) they file their tax returns. More and more taxpayers are taking this opportunity to be brazen by utilizing aggressive tax planning strategies, or by flat out avoiding/evading taxes altogether on the assumption they won’t get caught.
Any smart business person knows that the function of your business that brings in the revenue is absolutely necessary for the rest of the organization to function. Perhaps President Trump sees the IRS that way now too – that without them bringing in money the rest of the government can’t function. I’ve personally heard IRS Commissioner Chuck Rettig and the head of IRS Criminal Investigation Division Don Fort give impassioned talks on this topic, and their rationale is compelling and spot on. They are ramping up and hiring new people at the IRS. So what does this mean for tax whistleblowers? It means that now is the time to get information of noncompliance to the IRS. Why? Because the “supply” of good cases has increased due a recent lack of enforcement, and the “demand” for good information to bring new cases is finally about to increase.