Whistleblowers and Tax Enforcement: Using Inside Information to Close the Tax Gap
![handle is hein.journals/aktax24 and id is 5 raw text is: WHISTLEBLOWERS AND TAx ENFORCEMENT:
USING INSIDE INFORMATION TO CLOSE THE TAX GAP
Edward A. Morse*
I. Introduction ........................................................................... 1
II. Overview of the IRS Examination Function ..................... 4
A. Prophylactic Benefits .................................................. 5
B. Direct Benefits ........................................................... 7
III. Rewards for Informants .................................................. 13
A. Discretionary Informant Rewards Under I.R.C. §
7623(a) ...................................................................... 13
B. Whistleblower Awards Under I.R.C. § 7623(b) ..... 18
IV. Ethical Considerations: Additional Limits for
Whistleblower Awards? ...................................................... 29
V. Conclusions .................................................................... 35
I. INTRODUCTION
Voluntary self-assessment is a longstanding and indispensable
aspect of our federal income tax system.' The Internal Revenue Code
requires taxpayers to file timely and accurate returns of their taxable
income and to pay the taxes due.2 Taxpayers generally comply with
* Professor of Law, McGrath North Mullin & Kratz Endowed Chair in Business Law, Creighton
University School of Law, morse@creighton.edu.
1. See Millsap v. Comm'r, 91 T.C. 926, 931 n.10 (1988). The court stated:
This concept [that a return is required for an assessment of federal income tax] is deeply
rooted in our history. In part, our country was founded as the result of tax revolt wherein
citizens protested being taxed without their consent. Our tax system is rooted in the
concept of voluntary compliance which does not permit the government to arbitrarily
assess tax without a proper list or report.
Id.
2. See, e.g., I.R.C. § 6001 (West 2008) (imposing general obligation to keep records and
make returns); § 6012 (requiring income tax returns); § 6072 (noting the time for filing income tax
returns); § 6151 (noting the time and place for paying taxes).](ViewImageLocal?handle=hein.journals/aktax24&div=4&collection=&method=preview&ext=.png&size=3)
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Whistleblowers and Tax Enforcement: Using Inside Information to Close the Tax Gap
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