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Report shows extreme inaction into tax fraud by IRS

Thousands of whistleblower cases have gone un-investigated over the last seven years.

A new report indicates that the U.S. Internal Revenue Service has not acted upon whistleblower information, thereby failing to recover the millions of dollars lost through tax fraud. The problem is one of the IRS failing to act on whistleblower tips that come through — and plenty of them have over the past seven years. 

An annual report is filed by the IRS and sent to Congress, detailing the agency’s fiscal year activity. Forbes writes that this year’s report demonstrates a severe lack of adherence to the calls made by whistleblowers that could have led the IRS to recover massive amounts of money lost through tax fraud. Out of thousands of submissions, only nine awards have been made to whistleblowers since December 2006. That year marked the enactment of a law instituted by Congress to encourage general citizens to divulge information about any entities committing tax fraud that exceeds $2 million. The provision was a section included in the Tax Relief and Health Act of 2006 that detailed how whistleblowers may receive rewards of up to 30 percent of the amount collected by the IRS as a result of the information provided about tax fraud. Before the act was instituted, the IRS rarely paid out to the whistleblowers who provided information leading to successful recovery of dollars lost through tax fraud. 

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Juliana Kenny

Juliana Kenny is a contributor to, covering a range of topics including patent litigation, conflict mineral laws, executive compensation, and antitrust regulation. Juliana earned B.A.s...

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