M E M O R A N D U M
TO: Reporters and Editors
RE: IRS Whistleblower Program
DA: Tuesday, September 11, 2012
Senator Chuck Grassley made the comment below about the IRS whistleblower award announced today for Bradley Birkenfeld, who “provided information on taxpayer behavior that the IRS had been unable to detect, provided exceptional cooperation, identified connections to parties to transactions,” according to the IRS.
Senator Grassley authored whistleblower legislation enacted in 2006 to obtain valuable information about major tax fraud. He has pressed the Treasury Secretary and the IRS Commissioner for effective implementation of the IRS whistleblower program during Senate hearings and through a series of oversight letters. 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.
Senator Grassley’s comment:
“This case provides evidence about how the whistleblower program can be effective because the IRS is saying its work against this kind of tax fraud would not have been possible without the whistleblower. By paying an award as the law allows, the IRS encourages courageous actions by others against such big-dollar tax cheating. The potential for this program is tremendous, and it’s up to the IRS to continue paying rewards and demonstrating to whistleblowers that the process will work and that they will be heard and protected. An award of $104 million is obviously a great deal of money, but billions of dollars in taxes owed will be collected that otherwise would not have been paid as a result of the whistleblower information. Again, billions of dollars are paid that would otherwise be lost to major tax evasion. This whistleblower program gives respect to honest taxpayers by targeting tax fraud. Unfortunately it has taken the IRS nearly four years to settle this whistleblower case. If the IRS is serious about encouraging future whistleblowers, it needs to continue to honor the spirit and intent of the law and issue awards in a timely manner.”