13:59, July 5, 2012 by Evelynn Brown, J.D., LL.M under: False Claims Act
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By Patrick Carmody, Esq.
Serious concerns have been raised about I.R.S. internal regulations that seem to disincentivize whistleblowers from coming forward, the effect of which is to make rewards discretionary rather than mandatory as the statute requires. At a time of seriously escalating federal deficits, and what seems to be wide-scale tax fraud by Corporate America and Wall Street, the I.R.S. approach seems to be backwards to say the least.
Technically, the I.R.S.’s regulations seem to treat most, if not all, tax whistle-blowers as “planners and initiators,” which kicks them out of the mandatory reward program leaving their rewards to the discretion of the I.R.S., despite a well-established body of law under the False Claims Act, upon which the I.R.S. program was modeled, that would confine “planners and initiators” to the “principal architects” of the scheme.
Surely, the I.R.S. would want whistle-blowers to come forward and not continue to treat them like the proverbial “skunks at a picnic.” Correcting IRS internal regulations to make only principal architects of the reported scheme “planners and initiators” would go a long way towards encouraging whistleblowers.
A number of commentators have written the I.R.S. and Senator Grassley, practically begging them to change the regulations to make the I.R.S. more user-friendly for whistle-blowers. Below is a letter presenting the issue in greater detail. Anyone with a view on this should contact Senator Grassley’s office and send their comments to the I.R.S. at WO@irs.gov