GAO Tax Whistleblowers Tax whistleblowers help the IRS collect billions in underreported taxes. Just how well is the IRS whistleblower program working? AN OVERVIEW FROM GAO-16-20 Whistleblowers provide a much-needed service. Since 2011, whistleblower claims have helped the IRS recover almost $2 billion in taxes that may have gone uncollected. [Graphic showing 2011 to 2015, each year has a larger circle around it. Label for 2015 states: "$2 billion. $1 billion came from 17 high-dollar* whistleblower claims." (*High-dollar claims are those that allege over $2 million in tax noncompliance.) Whistleblowers have been rewarded with $315 million for the information they provided. [Graphic: Pie chart in from of whistle artwork. Pie is labeled: "$261 million""17 high-dollar claims" and "$54 million" "483 other claims"] The IRS is still evaluating over 30,000 whistleblower claims. More than 12,000 of these are high-dollar claims. These claims could help further reduce the tax gap – the difference between taxes owed and taxes paid – and the federal deficit. [Graphic: Boxes representing 12,000 claims are colored green. Boxes representing the remainder of the 30.000 claims are colored gray.] But we found issues that, if resolved, could help the IRS maximize the benefit provided by whistleblowers. The IRS is facing a backlog of claims. The IRS evaluates every claim it receives, but many claims do not pan out. Less than 5% of all claims closed between 2013 and August 5, 2015, have resulted in an award payment. [Graphic: Pie chart with "<5%" shown in green, and the remainder shown in light red and labelled "claims closed 2013-2015"] Claims can be complicated, in some cases taking 7 or more years to complete. [Graphic: Timeline showing "start", "year 1", "year 2","year 3", "year 4", "year 5","year 6", "year 7" with a person next to each year. At year seven the person is holding an envelope next to a mailbox.] More claims are coming in every year. In 2015, the backlog reached over 11,000 claims in 3 areas: - Initial review - Review of whistleblower contribution to examination - Rejection and denial processing. Streamlining plans were put on hold and staffing has not kept pace with the workload. [Graphic: Person with file folder running to person at a desk. IRS communications are limited. - Untimely reports and inconsistent data complicate congressional oversight. [Graphic: Person holding a report, with a question mark. Calendar in background.] - Prohibitions on sharing taxpayer information keep whistleblowers in the dark—-sometimes for years. [Graphic: Lock.] - The IRS has not leveraged its authority to enter into disclosure contracts with whistleblowers to obtain more information. [Graphic: Stack of papers with IRS logo on cover.] Whistleblowers could be better protected. - The IRS retained whistleblower information in taxpayer files against policy. [Graphic: Binary ones and zeros.] - The IRS has mailed sensitive information–including names of whistleblowers–to the wrong addresses. [Graphic: Stack of letters.] - The IRS miscalculated award payments for 3 of the 17 claims we reviewed, delaying full payments to some whistleblowers. [Graphic: Whistle.] - Unlike other whistleblowers, tax whistleblowers lack legal protections from employer retaliation. [Graphic: Special agent badge icon.] Our recommendations - Congress should consider passing tax whistleblower retaliation protections. [Graphic: Capitol dome.] - The IRS should better protect whistleblowers' information. [Graphic: Lock.] - The IRS should provide better information to Congress and whistleblowers. [Graphic: Paper with checkmarks.] - The IRS should streamline its workflows and improve data capture. [Graphic: Arrows going in the same direction.] - The IRS should strengthen award calculation procedures. [Graphic: Calculator.] LOOKING FOR MORE INFORMATION? Visit GAO.GOV/GAO-16-20 This work has been released into the public domain. GAO