05/10/2012 05:22 pm ET Updated Jul 10, 2012

President Obama Should 'Light A Fire' Under IRS Whistleblower Office, Watchdog Says

By Patrick Temple-West

WASHINGTON, May 10 (Reuters) - A Republican senator advocating for whistleblowers called on President Barack Obama to "light a fire" under the Internal Revenue Service's whistleblower office after a new report highlighted concerns about the program.

The comments, on Thursday, came shortly after a watchdog for the IRS criticized the agency's whistleblower program, saying it may produce inaccurate data and that deadline goals are not strong enough.

Heaping more criticism on the unit set up to help the IRS catch tax cheats, Republican Senator Charles Grassley said Thursday's report "confirms my concern that the IRS isn't serious about processing whistleblower claims in a timely way."

Obama "could do a lot for tax compliance by lighting a fire under the IRS on whistleblowers," Grassley said.

The Treasury Inspector General for Tax Administration, which monitors the IRS, said that data errors can arise when the IRS moves information from multiple systems into one registry for whistleblower claims.

TIGTA initially raised the data accuracy concerns in August 2009. The Treasury group said this issue had not been fully addressed.

Additionally, TIGTA said "timeliness standards for processing claims have not been fully established."

The IRS said it has not found errors in whistleblower data.

"The IRS recognizes that improvements can be made in collection and the use of data in our management information system and that more can be done to oversee the evaluation of whistleblower claims," said IRS spokesperson Michelle Eldridge.

"The whistleblower office is implementing several of these recommendations," she said.

The whistleblower program pays people who give the IRS information that exposes tax cheating. A 2006 law, written by Grassley, updated the program and put no limit on the size of reward a whistleblower can get.

The IRS said it has paid out awards in fiscal 2011 under the new law, without giving details. In fiscal 2010, the most recent year where data was available, the IRS paid $18.7 million in rewards and collected $464.7 million in taxes stemming from whistleblower claims.

Grassley said in an April 30 letter to IRS that since last September he has heard from whistleblowers complaining their claims have not been progressing at the IRS.

"Open-ended time frames don't get the job done," he said on Thursday. (Reporting by Patrick Temple-West; Editing by Kevin Drawbaugh and Steve Orlofsky)