whistleblower payouts down; critics say program too slow
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[April 08, 2014]
By Patrick Temple-West
WASHINGTON (Reuters) — The U.S.
Internal Revenue Service reported it made progress last year in
rewarding tax whistleblowers with a few big cash payouts, but
critics said the tax agency is still struggling to act quickly on
For the fiscal year ended September 30, the IRS said late last week
that it paid whistleblowers $53.1 million, down from $125.4 million
in 2012; $8 million in 2011; and $18.7 million in 2010.
The whistleblower program is aimed at encouraging people who know
about tax evasion by companies or individuals to step forward and
alert the IRS. Critics have long complained that the program moves
too slowly and is inadequately funded, making would-be
whistleblowers reluctant to file claims.
Republican Senator Charles Grassley of Iowa, who has hammered the
IRS for not using the whistleblower program more effectively, said
last year's larger payout total was good news.
But, he said in a statement on Friday, "The bad news is the progress
in making payouts is slow. My worry is that the slow progress will
cause the tips to dry up."
The number of new whistleblower submissions, however, inched up to
355 in 2013 from 332 in 2012, the IRS report said.
Collections of taxes by the IRS from taxpayers exposed by
whistleblowers fell last year to $367 million from $592.5 million in
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The 2012 awards payout total was unusually high because of Bradley
Birkenfeld, a former UBS AG employee, who got $104 million from the
IRS for exposing Americans who hid millions of dollars in Swiss bank
The IRS said whistleblowers should not expect a sudden surge in big
rewards. "The number of payments ... is not projected to grow
dramatically in fiscal 2014," the report said, adding it takes five
to seven years to collect taxes from valuable tips.
(Reporting by Patrick Temple-West; editing by Kevin Drawbaugh and
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