Grassley criticizes IRS for dragging feet on whistleblower cases

Friday - 5/11/2012, 12:56pm EDT

Sen. Chuck Grassley (R-Iowa)

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To hear Sen. Chuck Grassley (R-Iowa) tell it, the Internal Revenue Service has complaints from thousands of corporate whistleblowers whose companies are evading millions in taxes. And yet, he said, the IRS has been slow to jump on this important source of revenue.

"Thousands of whistleblowers have reported something, but only one action has been taken," said Grassley, referring to a Philadelphia company that was bilking taxpayers out of approximately $20 million. "The whistleblower is going to get an award, but there's thousands of others out there."

Under the False Claims Act, billions has been returned to the federal coffers thanks to whistleblower actions.

"I think we've got a good track record of whistleblowers giving good information that restores money to the federal Treasury that belongs in the federal Treasury," Grassley told The Federal Drive with Tom Temin and Emily Kopp Friday.

Seven months ago, Grassley wrote a letter to the IRS based on a Government Accountability Office report examining the length of time it takes the agency to investigate whistleblower complaints, collect money and send out rewards.

The Philadelphia award was announced a year ago, but the whistleblower has not received an award yet. The slow process discourages whistleblowers from reporting wrongdoing, Grassley said.

He also pointed to the report of 19 Internal Revenue Service employees meeting in a hotel in Florida for a conference on offshore finance rather than resolving the thousands of whistleblower cases that aren't being investigated.

"OffshoreAlert is a widely attended international conference on combatting offshore tax evasion attended by government officials from numerous countries," an IRS spokesman said. "The IRS sent to this conference a handful of speakers and other employees who are leading different aspects of the IRS' far-reaching anti-offshore tax evasion initiative. Conference fees for some IRS employees were waived, and none stayed at the Ritz Carlton hotel. In addition, a number of the IRS staff members live in the area and work at the IRS' Miami area office, which is responsible for international tax enforcement matters related to Latin America and the Caribbean."

Overall, Grassley wants people to understand that if they blow the whistle on wrongdoers, they may be entitled to an award, and he wants agencies like the IRS to do their jobs and investigate these claims promptly.

"It's just common sense," Grassley said. "When they know that there is money that hasn't been paid, they collect it and, with the collection of it, you know there's a reward to be made, make the award."