By TIOL News Service

NEW DELHI, DEC 20, 2015: THE United States Government Accountability Office (GAO) has pitched for a better deal for tax whistleblowers that helped Internal Revenue Service (IRS) collect almost USD 2 billion in additional revenue since 2011.

In a recent report titled 'IRS Whistleblower Program -Billions Collected, but Timeliness and Communication Concerns May Discourage Whistleblowers', GAO says: "Congress should consider legislation that would provide protections for tax whistleblowers against retaliation from their employers."

GAO has also recommended eight initiatives that IRS should take to improve tax whistleblowers program. One suggestion advises IRS to "Strengthen the procedures for calculating award amounts and for the issuance of the preliminary award recommendations and award letters to whistleblowers."

Another recommendation calls for developing an additional or revised fact sheet about the whistleblower claim process.

IRS Whistleblower Office (WO) awarded over USD 315 million to whistleblowers during period fiscal year 2011 and June 30, 2015. The of this amount was for claims for over USD 2 million. In a review of such payments, GAO found that WO made errors in determining some awards, resulting in over- and underpayments totaling approximately USD 100,000. In response to errors, IRS began corrective actions, including ensuring total collected proceeds are verified before making award payments. However, the WO has not documented this new procedure, putting it at risk of making additional errors in award payments.

Tax whistleblowers-individuals who report on the underpayment of taxes or on the violation of tax laws by others-potentially help the Internal Revenue Service (IRS) collect billions in tax revenue that may otherwise go uncollected. While IRS has had the authority to pay awards to whistleblowers for more than a century, the Tax Relief and Health Care Act of 2006 expanded the program to pay qualifying whistleblowers a minimum of 15 percent of the collected proceeds for high-dollar claims. This act also established WO within IRS to manage the whistleblower program.

Proceeds collected as a result of whistleblower information can help reduce the tax gap-the difference between the amount of taxes owed by taxpayers and the amount voluntarily paid on time. IRS has estimated the net tax gap at USD 450 billion.

WO is responsible for processing thousands of tax whistleblower claims annually for two related whistleblower programs: for claims of USD 2 million or less, the 7623(a) program, and for claims over USD 2 million, the 7623(b) program.

The whistleblower claim review process takes several years to complete, and GAO found that the WO is not using available capabilities to track and monitor key dates in its claim management system. Without available information on key dates related to award review and payments, the WO is unable to assess its performance against timeliness targets and risks unnecessarily delaying award payments.