Constantine Cannon whistleblower partner Michael Ronickher wrote on the Taxpayers Against Fraud blog about three key changes the IRS could make to help its whistleblower program reach its full potential.

The program, which provides rewards of 15-30% of the funds collected by the IRS because of a tip, is undeniably important. As Mike wrote, “Since 2007, the IRS has recovered $6.14 billion based on information from whistleblowers, and it has paid $1.01 billion in whistleblowers rewards. That is both a big recovery for the public fisc and a great return on the investment in whistleblowers.

“But there is much, much more to do. That $6 billion comes out to under $500 million recovered per year on average. In comparison, those who dodge taxes are responsible for a tax gap generally estimated at around $400 billion per year.”

He proposed three important changes that could improve the program:

• Be more transparent. Carveouts in the taxpayer privacy laws permit—and in some instances require—the IRS to communicate with whistleblowers about the status of their tips. The agency should be more communicative, which would improve relations, encourage more meritorious tips, and reduce unnecessary litigation over awards.
• Leverage whistleblowers’ knowledge and expertise. The IRS is under-resourced and should tap the private-public partnership intended by the whistleblower program when it is carrying out audits and investigations. The IRS has understandably been reluctant as an institution...

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