ATTORNEY NEWSLETTER
Whistleblower Awards Increasing
IRS Whistleblower Program Improvement Act of 2021
Important 2021 Tax Court Whistleblower Decisions
In 2021, the Internal Revenue Service (IRS) Whistleblower Program did not draw the same attention as other whistleblower reward programs. The Securities and Exchange Commission (SEC) Whistleblower Program made headlines for awarding over $500 million to whistleblowers this past fiscal year and the Commodity Futures Trading Commission (CFTC) issued a record $200 million award in October. Meanwhile, the IRS did not publicly announce any whistleblower awards, though awards may have been issued secretly. But that is not to say that there were not important developments that occurred for the IRS Whistleblower Program in 2021. A major reform bill was introduced in Congress this year which offers much needed fixes to the program. Furthermore, a number of Tax Court rulings were issued concerning whistleblowers which have interesting implications for future IRS whistleblower claims. Evans Law Firm, Inc. represents insiders and other persons with credible, original information of offshore tax avoidance and other tax fraud and assist in submitting applications to the IRS based on that information for an ultimate reward if the IRS recovers unpaid taxes. If you have credible information of tax fraud, call us today at (415)441-8669. Our toll-free number is 1-888-50EVANS (888-503-8267).
The IRS Whistleblower Program Improvement Act of 2021
The IRS Whistleblower Program Improvement Act of 2021 was introduced this past term in Congress. The bill, which is supported by whistleblower advocacy groups, makes several reforms to the IRS Whistleblower Program in order to improve the program’s operations and better protect whistleblowers who expose tax fraud:
- Provide for de novo review of whistleblower decisions in Tax Court;
- Remove sequestration of whistleblower awards;
- Impose interest on whistleblower awards that are subject to significant delay;
- Dedicate funding for the whistleblower office;and
- Add clarification on deduction of attorney’s fees.
The bill was referred to the Senate Finance Committee upon its introduction, and is pending
2021 Tax Court Decisions
Throughout 2021, the United States Tax Court issued a number of decisions related to IRS whistleblowers. Some of these decisions have notable implications for IRS whistleblowing moving forward.
In Insinga v. Commissioner of Internal Rev. Service, 9011-13W, 2021 WL 4983084 (U.S. Tax Ct. Oct. 27, 2021), the United States Tax Court found that although the decedent had passed away while his whistleblower case was still pending, his estate could pursue the whistleblower’s claim in his stead. This is particularly notable because of the long delay times in the processing of IRS award claims. Multiple whistleblowers have died before they received their award.
In Rogers v. Commissioner, 157 T.C. No. 3 (2021), the Tax Court ruled that the IRS abused its discretion by failing to follow its own rules in rejecting a whistleblower award claim. In 2019 a whistleblower filed nine separate Applications for Award for Original Information to the IRS’ Whistleblower Office (WBO) alleging that nine taxpayers had conspired to commit “grand theft through conversion” of the assets of his mother. In response, the WBO sent a letter to the whistleblower stating that it rejected his claim because it “decided not to pursue the information you provided.” The Tax Court ruled that the WBO abused its discretion in rejecting the whistleblower’s claim. That is because there are set regulations outlining the differences between award rejections and award denials. According to the Tax Court ruling, the WBO did not provide justification for rejecting the award claim; not pursuing a whistleblower’s information is cause for a denial not a rejection.
Contact Us
Ingrid M. Evans represents individuals in San Francisco and throughout California with credible, original information of any kind of tax fraud, including offshore tax avoidance measures, and use of foreign corporations and accounts to avoid taxation or the like. Ingrid can be reached at (415) 441-8669, or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. Our toll-free number is 1-888-50EVANS (888-503-8267). Ingrid also handles whistleblower actions under the Financial Reform, Recovery, and Enforcement Act (FIRREA/FIAFEA), the Commodities Futures Trading Commission Whistleblower Program, the Securities and Exchange Commission Whistleblower Program, False Claims Act cases, the FINRA Whistleblower Office and the California False Claims Act.
