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IRS whistleblower program recovers $472M from tax evaders

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The Internal Revenue Service Whistleblower Office released its 2020 Annual Report Tuesday, documenting how whistleblowers were responsible for recovering $472 million in back taxes, sanctions, penalties, and interest from tax evaders.

According to the IRS Whistleblower Office Annual Report, in fiscal year 2020:

  • 169 awards were paid to whistleblowers.
  • The total amount of awards (before sequestration) totaled $86,619,032.
  • The IRS collected $472,080,014 from tax law violators, including $110,438,166 obtained from criminal tax cases.

Since 2007, the IRS Whistleblower Office made awards totaling more than $1.01 billion based on the collection of $6.14 billion in back taxes, interest, penalties, and criminal fines and sanctions.

“The IRS whistleblower law continues to demonstrate the importance of whistleblower reward laws.  Whistleblowers are the eyes and ears of enforcement, and their disclosures are essential for prosecuting tax cheats,” said whistleblower attorney Stephen M. Kohn, a partner at Kohn, Kohn & Colapinto.

The annual report also documented a decline in whistleblower-related recoveries and awards over the past three years.

In 2018, whistleblower claims triggered $1.441 billion in collected proceeds (i.e. back taxes, fines, penalties, etc.), and whistleblowers obtained $312 million in awards.

In 2019, the amount of collected proceeds was $616 million, and $120 million was paid in awards.

“The IRS must invest in its whistleblower program,” said Kohn, noting that it currently takes the IRS 10.79 years, on average, to pay a whistleblower claim, and that there are 23,943 open whistleblower cases.

“These numbers are not acceptable,” Kohn said. “The backlog cost taxpayers billions in lost revenues. The delay in payments is seriously prejudicing the program. Congress and the Department of Treasury must allocate more resources to its whistleblower program.”

 

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