A consequence of several years of budget cuts at the IRS is a decline in their enforcement efforts.  The Wall Street Journal has recently run several stories detailing these statistics, noting new data that shows an overall decline in IRS audit rates for individuals as well as a decline in the number of large corporate tax audits.   The context for all the press releases and news stories on this topic is the current debate on Capitol Hill regarding the future budget of the IRS.  Commissioner Koskinen has been asking for a budget that at least brings the IRS back to where it was in 2010.


Where does this leave prospective whistleblowers?  There is no doubt that a climate of reduced IRS enforcement leads to a lack of accurate self-reporting and more aggressive tax return positions being taken by individuals and even by large corporations, even in a post SarBox world.  While this means that there will be even more fodder for potential whistleblowers to blow the whistle on, it also means that the IRS has less resources to pursue claims.  In such a case, we believe it is more important than ever before that your submission to the IRS be concise, that your allegations be factually and legally accurate, and most of all your submission must compel the IRS to act.  The IRS considers itself fully busy, especially now, and your submission must convince them that it is worth acting on instead of doing something else.   That’s a tough challenge to face when considering making an IRS whistleblower submission… but we like challenges.

  • Bubba Shawn

    Thanks Greg,

    Potential IRS whistleblowers have more to contend with than whether their audits get done. Now more than ever before during these past seven years, potential IRS whistleblowers should retain an experienced IRS whistleblower law firm that has a proven track record of shepherding their clients claims and getting their clients paid. The F211 submittal package has become more important then ever.

    Even with the most pro-whistleblower IRS, Commissioner Koskinen, there is lingering doubt of actually getting paid because every IRS whistleblower is considered a 7623(a) claim up and to by the time Whistleblower director. The IRS Whistleblower Office folks are burdened with passing on claims out to the Field offices. They don’t get to choose which audit get don’t and which don’t.

    On top of all that, IRS whistleblowers need to wait for over seven years before they get paid in large part because the WO imposes the hated two year wait rule. September 11, 2012 my FOIA inquiry revealed six forms 11369s in my claim file. October 29, 2013 I learned from the WO that “a number of actions need to be completed”.

    The partial payment rules authored by Director Whitlock, likely in good faith, were just wishful thinking upon everyone suckered into believing in those directives were followed upon.

  • Impatient whistleblower

    Do you mind sharing how long the FOIA inquiry took? Did the IRS fight the inquiry or were they quick to respond? This looks like an interesting way to find out if anything has been done on a claim. Obviously the whistle blower’s office is still finding ways to deny claims. However, it should be a good sign if there is an 11369 and no denial letter has been sent.

  • Bubba Shawn

    Impatient whistleblower,

    I mailed my FOIA request August 7, 2012 and received the response September 11, 2012. The response was a denial on the copies of 11369s but that letter said how many of those forms are contained in my claim file.

    My Subsequent FOIA requests are complete failures because the WO caught wind with what I was doing and quashed my attempts telling me that all future FOIA requests would be deemed “imperfect”.

    My strategy was to find out if IRS forms were in my file so that I could monitor my claim progress. I was relying upon the notion that in the IRS the left hand doesn’t know what the right hand is doing. That notion proved to be false because the Chief Counsel Office is ever vigilant over what they deem 6103 protected information.

    The IRS gives instructions on how to file FOIAs on their web site.

    Now that Commissioner Koskinen is in charge, IRS whistleblowers’ FOIA requests may be welcome. He has made public statements convincing skeptical practitioners and made decisions that seem to project that he understands that we just want to get paid.

    If Congress ever gets off his back, maybe Commissioner Koskinen could do more.