WASHINGTON – Senator Chuck Grassley is asking for a complete accounting from the Treasury Secretary and IRS Commissioner of questions he’s raised about the agencies’ flawed implementation of the IRS whistleblower program enacted in 2006. Grassley has placed a hold on nominees for two high-level Treasury Department positions until satisfactory responses are provided.
“The way the IRS and Treasury Department have handled the whistleblower program enacted more than five years ago is inexcusable. Any improvements have been made only under duress and in response holds I’ve put on administration nominees, and those changes are far less than what ought to be the standard,” Grassley said. “The lack of progress is demoralizing valuable whistleblowers who often put their own livelihoods at risk to speak up about wrongdoing.”
Grassley, who authored the 2006 overhaul of the IRS whistleblower program, said the IRS continues to go out of its way to limit the applicability of the updated statute at a disservice to honest taxpayers and good government.
“The 2006 legislation was intended to obtain valuable information about major tax fraud and prevent the IRS from shortchanging whistleblowers. So far, the IRS is using questionable tactics like the Justice Department did when the False Claims Act was updated 25 years ago to limit whistleblower awards, including now saying that collections of penalties under the Bank Secrecy Act aren’t eligible for whistleblower awards, for example,” Grassley said.
Grassley made his latest request for information today in a letter to Treasury Secretary Timothy Geithner and IRS Commissioner Doug Schulman. It follows a June 15 response from the IRS to an April letter from Grassley and the IRS’s release of several other documents, including a much delayed Whistleblower Annual Report to Congress and new timelines for processing whistleblower claims. “Ironically, the sliver of good news is that the IRS admits it has trouble processing whistleblower claims in a timely manner. Even so, the agency fails to establish accountability measures for its leaders and senior executives to pay out awards. Those checkpoints are clearly needed if the program is to work as Congress intended.”
Grassley said the Treasury Secretary and the IRS Commissioner have an obligation to effectively administer the IRS whistleblower program. The 1986 qui tam amendments to the False Claims Act, which Grassley also sponsored in Congress and which served as a model for the 2006 IRS whistleblower legislation, have recovered $30 billion to the federal treasury which otherwise would be lost to fraud by government contractors.
Grassley is a senior member and former chairman of the Senate Committee on Finance. He is currently ranking member of the Senate Committee on the Judiciary. He has pressed for effective implementation of the IRS whistleblower program during Senate hearings and through a series of oversight letters. Click to read letters from April 2012, September 2011, and June 2010 and IRS responses from June 2012, November 2011, and November 2010.
Click here to read Grassley’s June 21, 2012, letter to Geithner and Shulman.