SINCERE CONGRATS TO BRADLEY BIRKENFELD,
BUT MORE NEEDS TO BE DONE
By Patrick Carmody
Yesterday was a great day in the whistle-blower world. For yesterday, the IRS awarded $104 Million to Mr. Bradley Birkenfeld, the U.B.S. whistleblower credited with collapsing Swiss banking secrecy. We extend our heart-felt congratulations to Mr. Birkenfeld, his representatives from the National Whistleblowers Center for their truly stellar work, and Senator Charles Grassley, the tireless whistleblowers’ advocate, and a true U.S. patriot. This well-earned award goes a long way towards validating the IRS whistleblower reward program for all whistleblowers.
My grandmother used to say that “but” rendered preceding words passé. BUT, while the award represents a welcome inflection point for the IRS whistleblower program, the IRS needs to do much more to maintain this valuable program on an acceptable trajectory; Mr. Birkenfeld’s award must not be the apogee of a program that has languished on the edge of “obscurity” for years. Until recently, when a Bloomberg News article that highlighted the program’s defects prompted scorching criticisms from Senator Charles Grassley, the métier of senior IRS officials (particularly IRS Commissioner Mr. Shulman) has been to hinder and delay the program’s natural evolution by failing to support it publicly and larding it with inefficient and confounding operational policies, most of which still need to be corrected.
Far more important than Mr. Birkenfeld’s accomplishment, there are about 3,000 other whistleblowers in the IRS reward program, who have reported hundreds of billions of taxes owed by large-scale tax-cheats. The DOJ claims that, to date, the offshore account initiative has generated $5 Billion. (Sotto voce, one wonders if the DOJ claim resembles routine DEA claims for the “street value” of discovered drugs?! One suspects the DOJ numbers include all “repatriated” account values, not just the tax revenue generated from those illegal accounts.) The potential tax revenue from those other whistleblower cases lodged in the system dwarf the much-hyped offshore account collections, though most probably involve much less sexy tax-avoidance schemes than illegal Swiss bank accounts.
With wide-scale reports of tax cheating permeating mainstream thinking (we even have a Presidential candidate under a cloud of suspected tax avoidance!), the U.S. needs an effective IRS whistleblower program rather badly. Heck, let’s be honest: we need the revenue! American taxpayers expect fairness and equality, and the tax system is blatantly biased in favor or well-advised tax cheats. The IRS whistleblower program offers a tremendous opportunity to redress the real imbalance and bridge the “tax gap” by allowing the IRS to deploy its limited resources efficiently.
Yesterday’s award to Mr. Birkenfeld strongly suggests the IRS whistleblower reward program is on a good course, finally. Let’s keep it that way by focusing on the other 2,999 or so whistleblower claims infinitely more valuable in the collective to Treasury than the Swiss banking fiasco. We urge the IRS to pay the same close attention to the valuable whistleblower cases in the system as to a single, high-profile case such as Mr. Birkenfeld’s.
Patrick Carmody has filed over $20 Billion of whistleblower claims with the IRS Whistleblower Program.