The Internal Revenue Service (IRS) Whistleblower Program is meant to incentivize people with knowledge of tax evasion schemes to tip off the IRS and crack down on wealthy tax cheats.
However, the program has been plagued by delays, infighting and a lack of investigative resources, leading to a loss of an estimated $1 trillion in unpaid taxes every year. In his nomination for IRS Commissioner, Danny Werfel promised to make the Whistleblower Program a top priority and assess its troubles. Meanwhile, a bipartisan group of senators recently reintroduced legislation to improve the office.
In this article, we’ll explore the issues plaguing the Whistleblower Program and how it could be improved to help the IRS catch major tax evaders.
The Whistleblower Program was established by Congress in 2021 to incentivize people with knowledge of tax evasion schemes to give tips to the IRS. In exchange, whistleblowers can get a percentage of whatever the IRS collects, provided they weren’t involved in the tax evasion scheme.
Despite this incentive, the program has been criticized for long delays in investigating tips and a lack of resources. This has led to a dramatic decrease in the amount of money recovered by the office, from $1.4 billion in 2018 to $245 million in 2021.
There are several issues that have made the Whistleblower Program less effective than it should be.
One of the main challenges is a lack of...
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