Why the IRS Loves Whistleblowers

While the news about President Obama’s commutation of whistleblower Chelsea Manning is grabbing the headlines, the news about the IRS whistleblower awards soaring 322% is a warning to tax cheats.

Last year the Whistleblower Office made 418 awards, totaling close to $60 million, a 322 percent increase since 2015. Despite these increased awards, the amount paid out in 2016 was down from the previous year when $103 million was paid out. Still, the IRS is sending a vigorous message to the corporate world, cheat on your taxes and we’ll support the whistleblower.

In a Forbes article IRS Whistleblower Office director Lee D. Martin points out, “Whistleblowers have helped the IRS recover $3.4 billion that otherwise would have been lost to fraud. Cracking down on big-dollar tax fraud is a matter of fairness to the vast majority of taxpayers who pay what they owe. Still, the IRS and Congress can’t rest on our laurels. The IRS still is not as fast it could be in considering whistleblower information. Whistleblowers often have put their livelihoods on the line to come forward, and they deserve timely answers from the IRS. Another challenge is making sure the IRS interprets the whistleblower statute in a favorable light toward whistleblowers, which it doesn’t always do. I look forward to working with the new administration on whistleblower concerns.”

This focus on supporting whistleblower is important to keeping an open environment so whistleblowers feel comfortable coming forward. This allows them to justify the risk they are taking and also helps reduce corporate tax fraud by design. Despite this, many whistleblower cases never get heard as the IRS is often too busy to follow through. Many whistleblowers have gone to court to try and roust the IRS into action, though this tactic typically fails. Still, the upswing in claims is encouraging.

As to Chelsea Manning, we’ll leave it to you to decide if she is a traitor or a whistleblower hero.