The IRS Whistleblower Program took center-stage again, this time at the Federal Bar Association Section on Taxation’s 2015 Law Conference in Washington, DC.  Scott led the lively panel discussion about the IRS Whistleblower Program with Kevin Gillin, Special Counsel in IRS Office of Chief Counsel (Small Business/Self-Employed); Robert Wearing, Branch Chief in IRS Office of Chief Counsel (Procedure & Administration); and George Clarke, Partner at Baker & McKenzie, LLP.  The panel covered recent program and litigation updates, and touched on confidentiality concerns. 

The update on the administrative program covered the Treasury Regulations that were finalized last August and the various audits and inquiries of the program.  Of great interest was the preview of the yet-to-be-released 2014 IRS Whistleblower Office report to Congress by Mr. Gillin:

On a general level, in terms of the number of submissions, the number of claims that result from those submissions, and the amounts that have been paid are going to be similar … to the 2013 report.

This is consistent with Director Whitlock’s statements at the Denver meeting of the ABA Section of Taxation in September, where he said that award payouts in Fiscal Year 2015 will be larger than the payouts in Fiscal Year 2014.  Scott noted that he believes that the number of submissions that are technically sound and do not face limitations on collection or evidentiary issues have remained steady as well, even though these numbers are not reported. 

The litigation updates provided a capsule review of the opinions of the Tax Court to date.  Mr. Wearing noted that the United States Tax Court has been “very methodical” and that “we see the court moving toward standard of review … we’re not really at the point of substantive fights over the meaning of terms in [section] 7623 or whether the award was an appropriate amount.”

  • Bubba Shawn

    Thank you Erica,

    Let’s hope we are all included in the 2015 awards that Director Whitlock was talking about. Frankly, I’m am tire of waiting.

  • Bubba Shawn

    Well here we are close to the end of June 2015 and all we get is a preview instead of the FY 2014 Report that Senator Grassley declared was due no later than October 1st following the fiscal year end.

    There are only 100 days left in the FY 2015. Perhaps Director Whitlock’s preview is another tease just like his partial payments memoranda.

  • Roy J. Meidinger

    Whistleblower files motion for Injunctive Relief
    Whistleblower has filed for an Order for Injunctive Relief, also known as a Writ of Mandamus, in the Federal District Court, Middle District of Florida, Fort Myers Division, case Meidinger v. Commissioner of Internal Revenue, case No. 2:15-mc-8-FtM-38MRM. The request is for the Court to order the Internal Revenue Service to perform its job and investigate the Healthcare Industry and collect taxes owed to the Federal Government. The Federal District Court is the only court which has the authority to tell a United States employee or agency to do their job. The Tax Court does not have any authority to tell the Internal Revenue Service to do their job.
    On the private side of the healthcare industry business, the healthcare providers bill all patients the same standard charges. The problem is the healthcare providers and the health insurance companies created a secret kickback scheme, which involves paying a lower amount for the healthcare services provided to the privately insured patients. The healthcare providers enter into a contractual arrangement with health insurance companies to partially cancels the insured patients’ debts, if the insurance companies listed the provider on its approved on-network list and referred the insured members to the provider. This practice is also known as paying brokering fees. You can easily see these payment if you examine a patients Explanation of Benefits form. The form lists the original amount billed, the patients debt, and the agreed amount to be paid by the insurance company.
    The Internal Revenue Service knows this is going on but its tax experts believe the prior contract between the provider and insurance company supersedes the newer and clearer contract between the patient and the providers. Of course, this is wrong! The Internal Revenue Service healthcare tax experts were completely unaware of the Substantive Law, the Parole Evidence Rule. This rule simply states a prior written contract cannot supersede a new written contract, which is clear and stands by itself. The rule also states the billed amount cannot be changed. Under the U.S. Tax code once a bill is issued, it must be used to determine the gross amount billed for income tax accounting.
    The Internal Revenue Service has for the past thirty-two years maintained the position that the healthcare industry can write off the cancelled debt if they provider and insurance company calls the write-off a contractual adjustment. The tax code says that any brokering fees or kickbacks or cancelled debt, must be taxed. The Internal Revenue Service will not give a reason why it is not taxing the healthcare industry for the kickbacks. The motion for injunctive relief must be answered by the Department of Justice, who represents the Internal Revenue Service by Aug. 18th, 2015.
    The Whistleblower is acting Pro Se but is looking for representation. If interested please send me an email at RoyJMeidinger@comcast.net.
    Roy J. Meidinger