Reuters Quotes R. Scott Oswald in Report on IRS Whistleblower Hearing

Posted on April 12, 2013

In its report on an Internal Revenue Service hearing on controversial new whistleblower rules, the Reuters news agency featured remarks from R. Scott Oswald, managing principal of The Employment Law Group® law firm.

“The [IRS] whistleblower office needs to be much more open and much more welcoming to whistleblowers in the future,” said Mr. Oswald.

The IRS had asked for feedback on its draft of new rules for a whistleblower program that was created by Congress in 2006. When people report tax cheats under this program, the agency is supposed to share any money recovered as a result of the tip.

Since 2006 the IRS has paid only a handful of these rewards, however, and has drawn fire for its unaccountable sluggishness in following up with whistleblowers. Many whistleblower advocates say the latest proposal will make things even worse, as the new regulations make it less attractive to report tax fraud.

One of the agency’s biggest critics has been Sen. Chuck Grassley (R-Iowa), who wrote the law that created the whistleblower program — and who has said that the IRS’s proposed rules “will hamstring the program by limiting whistleblower awards and discouraging knowledgeable insiders from coming forward.”

Mr. Oswald was invited to address the IRS at the April 11 hearing after he submitted written comments about the new rules on behalf of The Employment Law Group, which represents many whistleblowers.

In his spoken remarks, Mr. Oswald focused on “a very simple fix” for an issue that IRS officials claim has stopped them from cooperating fully with whistleblowers — taxpayer privacy. The solution, said Mr. Oswald, is to have whistleblowers sign a confidentiality agreement under Section 6103(n) of the Internal Revenue Code.

Confidentiality agreements are “routine” in other U.S. government offices that deal with whistleblowers, he said, and encourage full communication.

R. Scott Oswald represents employees in whistleblower and discrimination cases. He has brought more than three dozen trials to verdict and recovered more than $90 million in judgments and settlements.