The cases take a long time but the IRS says it is working to push cases more quickly. UBS whistleblower BRadley Birnfelt collected $104 million in 2012, still the largest award to date. Mr. Birkenfeld revealed the wrongdoing of Swiss banks and U.S. taxpayers. Republican Senator Charles Grassley has submitted a bill to improve IRS communication with tax fraud whistleblowers and protect those whistleblowers from workplace retaliation. The measure would: (1) increase communication between the IRS and whistleblowers, while protecting taxpayer privacy, and (2) provide legal protections to whistleblowers from employers retaliating against them for disclosing tax abuses.
To increase communication, the bill specifically would allow the IRS to exchange information with whistleblowers where doing so would be helpful to an investigation. It would further require the IRS to provide status updates to whistleblowers at significant points in the review process and allow for further updates at the discretion of the IRS. It does this while ensuring that the confidentiality of this information is maintained. Whistleblowers have expressed concern and frustration in their inability to receive information from the IRS on the status of their cases, which may take years to resolve. Since these individuals often put their livelihoods on the line to come forward, poor communication adds to their anxiety and is a disincentive to others with knowledge of high dollar tax fraud.
To protect whistleblowers from employer retaliation, the bill extends anti-retaliation provisions to IRS whistleblowers that are currently afforded to whistleblowers under other whistleblower laws, such as the False Claims Act and Sarbanes-Oxley. Tax whistleblowers may be easily identified within their firms as having specific knowledge of tax fraud. Extending the protections to tax whistleblowers that apply to whistleblowers in other fields is a matter of fairness and in the interest of U.S. taxpayers who benefit from such whistleblowing, Grassley and Wyden said.
Jeffrey Newman represents whistleblowers