On January 6, 2020, the IRS Whistleblower Office released its annual report to Congress. The Office reported that it collected $616.8 million in fiscal year 2019 as a result of information provided by whistleblowers, out of which $120.3 million was paid out as whistleblower awards, for net collections of $496.5 million. This is a decrease from the $1.13 billion in net collections in fiscal year 2018 (which has been described as an outlier year), but an increase from the $156.6 million in net collections in fiscal year 2017. A total of 3,640 whistleblowers filed claims in fiscal year 2019, including 282 whistleblowers from outside of the United States.
Practice Point: Whistleblower actions are a good reminder to make sure that your privileged and confidential tax information remains in the hands and minds of only those employees and officers who have a need to know. A disgruntled or terminated employee may take the opportunity to play the “whistleblower lottery,” removing sensitive and privileged material and handing it over to the IRS. With the start of the new year, it’s a worthwhile investment of time and resources to make sure your sensitive tax strategies and information are stored and protected.