IRS To Set Up 'Whistleblower' Office

by Leroy Baker, Tax-News.com, New York

06 February 2007

The Internal Revenue Service has named Stephen A. Whitlock as director of its new Whistleblower Office, where he will be responsible for administering the program designed to receive information that helps uncover tax cheating, and to provide appropriate rewards to whistleblowers.

“This is an important new office at the IRS, and Steve brings a strong background in ethics and tax issues to help get this program off to a good start,” explained IRS Commissioner Mark W. Everson, adding that: “Under Steve’s leadership, we will meet expectations from Sen. Grassley and other supporters to run a robust program.”

During his 27-year government career, Whitlock has led the IRS Office of Professional Responsibility and helped run anti-fraud and abuse programs at the Defense Department.

The IRS Whistleblower Office, which was established by the Tax Relief and Health Care Act of 2006, will process tips received from individuals who spot tax problems in their workplace, while conducting day-to-day personal business or anywhere else they may be encountered.

A reward worth between 15% and 30% of the total proceeds that IRS collects could be awarded, if the IRS moves ahead based on the information provided.

Whitlock’s office will be responsible for assessing and analyzing incoming tips. After determining their degree of credibility, his office will assign the information to the appropriate IRS office for further investigation.

Grassley, ranking member of the Senate Finance Committee, praised the IRS's move.

“I’m known for being hard on IRS officials when they make a mistake, but it’s also important to give them credit for doing a good job," he stated.

"A good IRS whistleblower program is long overdue. One well-positioned whistleblower could expose millions of dollars of fraud. It might take IRS auditors years to catch that much cheating on their own. The taxpayers have reaped the success of the False Claim Act whistleblower rewards program. They’ll benefit from the same concept applied to tax cheating," he added.

Grassley authored the provision enacted last December to establish a new whistleblower office at the agency, and to increase the awards to individuals of money recovered if the IRS succeeds in collecting taxes owed, based on an individual’s tip. He also authored improvements of the IRS whistleblower function that are pending in the minimum wage, small business tax relief, and tax loophole closure legislation.

Prior to his new appointment, Whitlock served - since May 2003 - as the Deputy Director of the IRS Office of Professional Responsibility, which administers the regulations governing the practice of attorneys, CPAs, and other tax professionals. From March 1999 until May 2003, he was the director of the IRS Commissioner’s Complaint Processing and Analysis Group.

Before joining the IRS, Whitlock directed several programs at the Defense Department involving the identification, investigation and correction of fraud, waste and abuse.

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