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For Immediate Release
Contact:

Stephen M. Kohn or
Mary Jane Wilmoth
(202) 342-1903
mjw@whistleblowers.org

IRS On Verge Of Crippling Whistleblower Program

Whistleblower Advocates Submit Extensive Comment in Response to Proposed IRS Regulations

WASHINGTON

Yesterday, the National Whistleblower Center ("NWC"), the National Whistleblowers Legal Defense and Education Fund ("Fund"), Bradley Birkenfeld, Scott Rosen, and Gene Ross jointly submitted a comprehensive 84-page comment on the IRS's proposed rules for its whistleblower office (26 CFR Part 301 [Reg-141066-09]). Click here to view their comment.

The critical issues addressed in the joint submission include:

  • IRS rules that would severely restrict the scope of the IRS whistleblower program by limiting "collected proceeds" to violations of Title 26 only. The joint comment states that the statute was intended to cover all violations enforced by the IRS, even if they are in Title 31 or Title 18. A strong whistleblower program is needed to prevent tax fraud related to offshore banking.
  • The proposed IRS rules seek to define "related action" in an unreasonably and arbitrarily narrow manner. The NWC's position is that whistleblowers that provide information about a type of tax shelter or other complex transaction that the IRS would not have proceeded on otherwise, should receive an award for all proceeds collected as a result of that information.
  • The joint submission further states that the IRS needs to set reasonable deadlines for administrative action, both to encourage whistleblowing and to increase accountability. The IRS should promulgate regulations adopting and expanding on the guidelines in Commissioner Miller's June 20, 2012 Memorandum.

Dean Zerbe, the NWC's Senior Policy Analyst who also represents tax whistleblowers such as Bradley Birkenfeld, released the following statement in regard to the proposed rules:

"I appreciate the time and energy that the IRS put into these proposed regulations. However, the proposed regulations are the beginning not the end. My hope is that the IRS will listen closely to the whistleblower community and that we can at the end of the day have final regulations that are based on the plain language of the statute and meet the policy goals of Congress of encouraging whistleblowers to come forward by providing them awards based on the information they provide. It is the honest taxpayers of this country that will benefit from having a successful whistleblower program in place that helps the IRS address those engaged in tax evasion."

Stephen Kohn, Executive Director of the NWC and who also represents Birkenfeld and other tax whistleblowers stated, "The future of the IRS Whistleblower program is on the line. The final rules will either encourage employees to risk their careers to do the right thing, or they will create a straight jacket over the law thus thwarting its effectiveness."

The National Whistleblowers Center encourages U.S. Tax-payers to submit comments on the proposed rules. Click here to learn how.

Since 1988, the NWC and attorneys associated with it have supported whistleblowers in the courts and before Congress and achieved victories for environmental protection, government contract fraud, nuclear safety and government and corporate accountability.