The IRS collected more than $245 million as a result of whistleblowers’ tips, for which it made 179 awards totaling over $36 million in 2021, the agency’s Whistleblower Office said in its annual report to Congress.
According to the report, which was released June 13, the revenue was split between almost $130 million collected under Code Sec. 7623(a) and more than $115 million under Code Sec. 7623(b). Covering the period October 2020 through September 2021, the report found that the work of Whistleblower Office decreased as a result of the COVID-19 pandemic, though most operations have resumed in full.
The report noted the possible impact on tax revenue as a result of provisions in the Coronavirus Aid, Relief and Economic Security Act (CARES Act; PL 116-136), enacted in March 2020, that allow net operating losses from tax years 2018 through 2020 to be carried back up to five years.
“This may create a significant increase in the processing time for any claim with a tax year that falls within these carryback period,” the report said. It added that if losses are carried back, “additional time may be necessary to monitor for collection of proceeds.”
Since the whistleblower program began in 2007, the number and amounts of awards paid annually can vary significantly, “especially when a small number of high-dollar claims are resolved in a single year,” according to the report. The year in which an award is paid is generally not the year in which collections occurred because the IRS must wait to make a final determination of proceeds. That determination can occur only after a taxpayer has exhausted all appeals and can no longer file a claim for refund or otherwise seek to recover the proceeds from the government.
Over its 15-year history, the Whistleblower Office has paid awards totaling nearly $1.1 billion and collected $6.4 billion from noncompliant taxpayers, the report said.
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