If there was ever a question whether IRS Commissioner, John Koskinen, believed in the IRS Whistleblower Program, that question was answered affirmatively in his remarks before the Taxpayers Against Fraud Education Fund.  At one point, Koskinen even referred to the information provided by whistleblowers as “a godsend.”  The remarks, given September 15th in Washington D.C., focused on IRS support of the whistleblower program and, of course, budget concerns.

Notably, Koskinen acknowledged concerns about the pace of whistleblower award payouts and said that he expects the pace of awards to pick up in the coming year.  To back up that prediction, Koskinen pointed to his decision to increase staffing for the whistleblower program by more than 70 percent even in the face of tight budget constraints.  Moreover, Koskinen said that the additional 31 employees will “help us continue implementing the 2006 law and working to increase the pace of award payouts.”  Added to this, Koskinen said that the delegation order issued in August, which allows smaller awards to be approved by a senior manager in the whistleblower office, should help pick up the pace of award payouts because everything doesn’t have to flow through to the Director’s office. 

Koskinen also praised the IRS Whistleblower Office and Director Steve Whitlock for paying out over $186 million in awards and collecting more than $1 billion based on whistleblower information over the last three fiscal years.  Professing his support for the program, Koskinen said:  

“By helping the IRS improve tax compliance, the whistleblower program also helps to ensure the integrity and fairness of our tax system.” 

He also noted that while being a whistleblower is not always supported in our society, “if people are cheating on their taxes, it is a public service to let us know.”

Understandably, Koskinen closed his remarks by voicing his concern over the decreased IRS budget he has to work with.  The House passed legislation that would reduce the IRS budget by more than $1 billion below 2014’s budget, forcing the IRS to make “extremely difficult choices on both services and enforcement.”  Specifically, Koskinen said that if the House’s budget were enacted, the IRS would face “a very serious shortfall in personnel, in taxpayer services, in enforcement, and in information technology.”  That shortfall makes the assistance of tax whistleblowers that much more important to successful enforcement actions. Tax Partner, Scott Knott’s comments on Comissioner Koskinen’s speech appear in a recent Tax Analysts article in which he emphasizes that whistleblower information is key to efficient IRS enforcement as supported by data in a TIGTA study

 

  • myheadhurtz

    We have heard time again how much of a fan Koskinen is. But will that make Whitlock, who is not a fan of the whistleblowers, speed up payments on awards? Yes in the last 3 years, there may have been $186 million in awards. But most of that was only for 2 awards. One for $105 million & the other of $39 million. How many claims had to share $42 million? Talk is cheap. Until us whistleblowers start receiving our awards, I feel like we are watching a fiction puppet show.

  • Bubba Shawn

    This is great news! John Koskinen is implementing private sector practical solutions to getting the award money out. Because of the information vacuum plaguing IRS whistleblowers, this is the first revelation that Director Whitlock has been bogged down by small awards processing. I suppose we all should have figured that out reading the FY reports.

    It should not go unnoticed that IRS Commissioner Koskinen spoke to whistleblower lawyers not Director Whitlock. That is a first and should give us IRS whistleblowers some badly needed hope that we will not get cheated.

    My bet is that Commissioner Koskinen has reassured Director Whitlock and the WO staff that paying awards is a good idea and should be encouraged.

    The only way to know that for sure is for the WO to get the award determinations out and make sure the award amounts are generous.

  • impatient whistleblower

    I wouldn’t say that Whitlock was “bogged” down. Only 130 claims of any size were paid during 2013, or about 11 a month. As director of the whistle blower office, one of his primary jobs should be approving justified awards. Instead, he has found any and all reason to delay or deny awards, including refusing to issue decisions after statute of limitation on payments have expired.

    Until the tax court puts a stop to these practices, we should expect the current state of affairs to continue. A few big awards each year to generate positive press, but little if any movement on the vast majority of claims.

  • Bubba Shawn

    The results of Commissioner Koskinen making his speech to whistleblowers’ advocate include unprecedented since the 2006 law was implemented. Those of us that have been waiting for six years or more see the facts below as a positive change in attitude by the IRS Commissioner:

    1. IRS Commissioner is speaking to IRS whistleblowers for the WO;
    2. Claims eligible for awards are now split three ways that should ease priority and speed processing of award determinations;
    3. The IRS Commissioner said awards will increase in this next year;
    4. IRS Commissioner is making management announcements for the WO;
    5. The IRS WO will have more folks processing awards.

    None of the IRS Commissioners before Commissioner Koskinen gave the WO more that passing interests.

    That is a big deal!

  • Bubba Shawn

    If Commissioner Koskinen really wanted to “pickup the pace of award payments”, he would mandate that all whistleblower initiated audits required formal closing agreements with the tax cheats. He would shorten the wait for IRS whistleblowers by two years if he did that as Commissioner.

    He could also require lump sum payments instead of monthly payment agreements. on all whistleblower initiated audits.

    The IRS Commissioner has that authority. He just needs to implement that authority.

  • Bubba Shawn

    Another point to notice is that, unlike the final rules public comment hearing, no questions that may have been asked at the only opportunity to ask an IRS Commissioner about the WO and awards were published and made public.

    I imagine that whistleblower lawyers , many who objected to the final rules, were present.

  • 1) It’s good that the Commissioner of the IRS is going on the record to support the program;

    2) the WBO is hiring more employees, which is also good; and

    3) we agree with the Commissioner that the larger issue is the shrinking audit resources (= time) of the IRS agents who actually conduct examinations.

    The future success of this program lies in the 3rd item. The IRS needs resources to successfully prosecute whistleblower cases, or any cases for that matter, and we believe they should prioritize their allocation of agent time to enforcement actions which originated with whistleblower information because that has been proven to be the most cost effective according to the TIGTA study linked in Steve’s blog entry.