The IRS Whistleblower Office has undergone significant reform efforts to make the award program for tax whistleblowers more efficient and effective. Led by Director John Hinman, the WBO has implemented changes to improve the program and encourage more whistleblowers to come forward. Recent reports show an increase in award amounts, with nearly $38 million awarded in the most recent report.
Reforms have focused on areas such as improved communication, transparency, and processing of whistleblower filings. The WBO has also received support from senior management at the IRS, leading to improvements in staffing. A new revised Form 211 has been introduced to allow whistleblowers to provide more detailed information about tax violations and apply for an award. The form includes expanded data fields, instructions, and options for selecting alleged violations.
The IRS has highlighted the importance of whistleblowers providing a clear narrative with supporting documents in their submissions. The agency is becoming better at identifying issues of interest such as fraud in specific areas like Employee Stock Ownership Plans. The IRS is particularly interested in information about high-wealth individuals evading taxes, complex partnerships, corporate tax, foreign accounts, and emerging schemes or scams. Collaboration with other IRS offices has also been strengthened to ensure whistleblower submissions are given due consideration.
The IRS has started to recognize the value of whistleblowers and is actively encouraging them to come forward. With limited audit resources, the IRS relies on whistleblowers to help target cases more efficiently. The WBO is now more involved in key IRS meetings discussing exam priorities and new schemes. However, the IRS has issued guidance on who can make a whistleblower submission, particularly cautioning against taxpayer representatives who may be viewed as tainted.
The guidance outlines broad criteria for defining a taxpayer representative, including individuals representing the taxpayer in any capacity before the IRS. Uncertainty remains around what constitutes a taxpayer representative, leading to questions about potential taint or conflicts of interest. Whistleblowers, especially insiders, must consider these factors when filing a Form 211. Additional guidance from the IRS on this issue would be beneficial for potential whistleblowers.
Overall, the reforms and initiatives at the WBO signal better days ahead for tax whistleblowers. The changes aim to create a more welcoming environment for whistleblowers and streamline the process of submitting information about tax violations. With ongoing improvements and support from senior management, the IRS whistleblower program is poised for a more effective and successful future.
