The problem with the IRS whistleblower program isn’t the 2006 law or the quality of whistleblower information that the IRS is receiving. The IRS Whistleblower Office reports that it has received dozens of whistleblower submissions concerning matters involving tax losses greater than $100 million and thousands involving tax underpayments that exceed $2 million. The real problems are the IRS itself and institutional resistance to whistleblowers within the IRS that is hobbling the whistleblower program and draining its enormous promise.
The anti-whistleblower attitude was succinctly expressed by former IRS Chief Counsel Donald Korb shortly after he left the IRS and joined a white collar law firm that defends companies against the IRS. In a 2010 interview with the publication Tax Notes, he said:
“The new whistleblower provisions Congress enacted a couple of years ago have the potential to be a real disaster for the tax system. I believe that it is unseemly in this country to encourage people to turn in their neighbors and employers to the IRS as contemplated by this particular program. The IRS didn’t ask for these rules; they were forced on it by the Congress.”