When Congress implemented its latest version of the IRS Whistle-Blower Program in 2006 and created the IRS Whistle-Blower Office, the thought was that this was going to provide huge incentives for people to come forward and lower the large tax gap that exists in this country’s voluntary tax system. While the money-mandating aspects of the new law were a much needed improvement on the prior, purely discretionary system utilized by the IRS, the new law seems to have failed in many respects. For starters, the new IRS whistle-blower law does not expressly protect IRS whistle-blowers from retaliation, nor does it prevent the IRS from continuing to employ means by which to avoid having to make any payment of any award. Concerns remain that some parts of the IRS view whistle-blowers as akin to skunks at a picnic. Whistle-blowers otherwise seeking to vindicate their perceived right to an award will soon find that privacy concerns for the targeted or identified taxpayer will greatly complicate pursuit of the same. On top of that, whistle-blowers must understand the significant risks that go into whistle-blowing activities. The whistle-blower must be able to withstand the adversity that comes from such activities and be prepared to defend against actions taken back against them by the taxpayers they have targeted. In the end, absent much needed reform, one may legitimately ask, is it worth it? At a minimum, it is imperative that those who do decide to come forward and blow the whistle to the IRS do so with their eyes wide open as to the risks of doing so, and not be blinded by the lure of a possible, but far-too-rare, award.
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