Conversations: Stephen Whitlock
Stephen Whitlock's whistleblower office is ready to take your tax tips
Stephen A. Whitlock has one of those Washington jobs that are cloaked in secrecy: He heads an Internal Revenue Service office that fields tips from whistleblowers. If the tipsters help the IRS recover unpaid taxes, they are entitled to rewards.
Business has been brisk since the law was changed in 2006 to increase potential rewards. During the 2008 fiscal year, the IRS received tips from whistleblowers alleging that 1,246 individuals or businesses owed the government more than $2 million. In 64 cases, whistleblowers claimed their information was worth at least $100 million.
The Whistleblower Office has yet to pay a reward under the new law. And Whitlock says taxpayer confidentiality prevents him from discussing individual cases.
He did, however, help demystify the process and warned that even the hottest information is unlikely to produce overnight millionaires. Interview excerpts follow.
Q. Can you share any general description of the most interesting tips you receive?
I really can't. I can tell you that the best information, the best tips we get are from people who have typically got documentary evidence. They were at meetings. They have transaction records that they have obtained as a result of either a personal or a business relationship with the taxpayer.
What motivates whistleblowers to contact the IRS?
It's a mix of things. There's an element of "I'm doing my part, I'm paying my taxes, I'm doing what I'm supposed to do, and this taxpayer, whether it's an individual or business, is not, and they should be pulling their fair share." There's sometimes an element of "I had a bad ending to my relationship with this taxpayer," business or personal, that comes into play. Certainly financial incentive is there.
I've heard that, after whistleblowers submit their information, they are kept in the dark about the progress of the case and years can pass without them knowing what, if anything, came of the tip. Is that true?
Well, yeah. The Internal Revenue Code says that we may not disclose taxpayer information except in very limited circumstances, and telling a whistleblower what the status of the case is is not among those circumstances. So it sounds kind of cold and heartless, but there are two answers we can give them. One, your case is closed. And, two, your case is still open.
Once whistleblowers contact your office, do you turn them into undercover informants? For example, do you ask them to wear a wire, or to sneak documents out of their offices?
We never ask a whistleblower to sneak documents out of an office. When we interview these people, we ask them what they have and what they may have already taken out of their office, or from whatever source they had. But we are very careful to say we are not asking them to go get something else. Going in and wearing a wire, becoming an undercover source, that's an area that our criminal investigators would use if anybody in the IRS uses that technique. My understanding is that that is an extremely rare circumstance.