June 09,2006

Grassley: Report Shows IRS Could Better Use Whistleblowers to Catch Tax Cheats


To: Reporters and Editors
Re: TIGTA report on whistleblowers
Da: Friday, June 9, 2006

Sen. Chuck Grassley, chairman of the Committee on Finance, today made the following
comment on a new report from the Treasury Inspector General for Tax Administration, “The
Informants’ Rewards Program Needs More Centralized Management Oversight.”

“Today’s TIGTA report validates everything I’ve been saying about the benefits of an
effective program to encourage whistleblowers as well as the need for Treasury and the IRS to
overhaul the current IRS program that rewards individuals who blow the whistle on big tax cheats.
My investigations into tax fraud have made it clear. Without a whistleblower to give you a road
map, you can quickly get lost fighting tax schemes and shelters.

“The TIGTA report notes that the audits and exams based on whistleblower information are
nearly twice as productive as normal IRS examinations. Even the IRS’ own internal findings show
that rewarding whistleblowers is one of the best ways to fight tax cheats.

“However, TIGTA’s report also shows that even though Congress gave Treasury and the IRS
the tools, in terms of broad legal authority to reward whistleblowers, the IRS hasn’t gotten the job
done. TIGTA’s report makes clear that the IRS and Treasury still are far short in having a
professional, effective office to benefit from whistleblowers. For example, in 76 percent of the
claims rejected, TIGTA was unable to determine the rationale for the reviewer’s decision to reject
the claim. This has to stop. The IRS and Treasury are in a tough fight against tax cheats, and they
need to put out the welcome mat for whistleblowers.

“I intend to raise this report and the overall issue with the nominees for secretary of Treasury
and assistant secretary of Treasury for tax policy. I want a clear road map of reform so Treasury and
the IRS no longer treat whistleblowers like skunks at the picnic.”