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Editorial
Ominous consequences of Whistleblowing act
Friday, April 8, 2011
We remember a short-lived television story about the adventures of a crime-solving accountant.
Viewers evidently had a hard time connecting with a bean counter, no matter how charming.
That's unfortunate, because accountants actually do solve a lot of crimes, especially of the white-collar type.
But one tale that the IRS intended as a feel-good story about someone who was rewarded for doing the right thing has more ominous consequences, in our opinion.
The first person to benefit from the 2006 authorization of the IRS Whistleblower Office received a check for $3.24 million on Thursday -- 22 percent of the $20 million in taxes and interest the accountant found for the IRS, minus 28 percent in taxes, of course.
After the company he worked for ignored his warnings about a tax lapse, the accountant alerted the IRS, which then used the information in an audit it already had under way.
Although he filed the account in 2007, it wasn't until he hired an attorney to push the issue that the IRS got off the dime, so to speak.
The Whistleblower Office has only about 17 employees, and promises awards for returns of $2 million or more.
But something about a system that encourages accountants and lawyers to spy on employers is inherently wrong.
It's one more reason our tax system needs to be radically simplified to make it more fair and transparent.