On June 28, the Internal Revenue Service (IRS) released its Annual Report to Congress regarding the performance of the agency’s whistleblower program in fiscal year 2022.
According to the report, the IRS paid out 132 awards to whistleblowers totaling $37.8 million. That is just 21.9% of the $172.7 million collected from fraudsters in cases involving a whistleblower, and a decrease from last year’s 179 awards.
In FY 2022, the U.S. Securities and Exchange Commission, established by the Dodd-Frank Act four years after the IRS’s program, paid out $229 million in only 103 awards to whistleblowers.
“The IRS whistleblower program continues to lag behind other similar programs in the amount of awards to whistleblowers,” Stephen Kohn, founding partner at Kohn, Kohn & Colapinto LLP, said.
The IRS Whistleblower Program is available to whistleblowers, both in the U.S. and abroad, who report tax evasion and fraud. Similarly to other whistleblower reward laws, qualified whistleblowers are eligible to obtain a financial reward of between 15 and 30% of the collected sanctions.
Examples of frauds that are open to reporting on under the program include offshore tax havens, shell bank accounts, false reporting on tax returns, pyramiding (or withholding employee taxes and intentionally not remitting taxes to the IRS, then filing bankruptcy and starting another company) and failure to pay or report payroll taxes.
The IRS also reported the average wait times between a claim being submitted...
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