The future of DOGE may be uncertain as Elon Musk steps back from his daily work; but what is clear is that there remain important possibilities and opportunities for eliminating waste in Washington.
Throughout our government there are already programs in place that were created with the sole purpose of uncovering fraud; initiatives that to date have already recovered billions of dollars for the American government. These are the whistleblower programs run by offices in the Internal Revenue Service, Securities and Exchange Commission, Commodity Futures Trading Commission, and other federal agencies.
Strategic spending cuts are a worthwhile goal, but DOGE and the administration should embrace these whistleblower programs as existing tools that can be used to recoup government monies lost while making better use of government enforcement staff. Here, the approach (alongside Congress) should be not just to spare, but to bolster these program offices and encourage greater use of whistleblower information.
These programs not only have bipartisan support, but a proven track record of recovering lost monies the U.S. government would never see if not for the informants that come forward.
In one recent example, Credit Suisse agreed this month to pay $511 million for opening more than two dozen accounts for individuals looking to avoid their U.S. tax filing obligations. And it was whistleblowers who came forward to the IRS who made the settlement possible.
In general, these agency programs reward whistleblowers who come forward with actionable information by providing monetary awards made up of a portion of proceeds ultimately collected.
The IRS Whistleblower Program, modernized in 2006 by Senator Chuck Grassley (R-Iowa), incentivizes whistleblowers to come forward with information concerning tax evasion by offering a mandatory award of between 15 and 30 percent of collected proceeds if the agency acts on the whistleblower’s information.
Although whistleblowers have come forward by the thousands, the ability to effectively process claims, work cases, and pay out awards has proven a challenge. Providing these programs with the resources they truly need to attack systemic fraud will alleviate issues of bandwidth, is directly aligned with DOGE’s mission, and will be a worthy return on an investment.
For those skeptical of the effectiveness of whistleblowers, the numbers speak for themselves. The IRS Whistleblower Program has to date collected more than $7.4 billion based on informant tips. On the SEC side, the whistleblower program has taken in tens of thousands of tips that have resulted in the collection of more than $6 billion in sanctions.
Previous studies, including from the Treasury Inspector General for Tax Administration (TIGTA), have also found that these programs veer enforcement efforts toward efficiency. According to TIGTA, it has cost the IRS just four cents for every dollar the whistleblower program collected, compared to the 10 cents for every dollar collected for all other agency enforcement programs. As important, TIGTA found the whistleblower program was much better at targeting IRS enforcement action on bad actors, while leaving honest taxpayers alone.
Further, a recent study from Management Science found that similar whistleblower programs at the state level dramatically increased the deterrence of tax avoidance in the state and had a 3,000 percent return on investment. Getting people to voluntarily stay on the right path and comply with the law is the best answer.
The good news is that these programs are standing at the ready, already laying plans for the future. In April, the IRS Whistleblower Office released their first-ever multi-year operational plan.
The plan highlighted six strategic priorities, including enhancing the claims submission process, using high-value whistleblower information effectively, issuing awards fairly and quickly, increasing communication efforts, safeguarding taxpayer information, and ensuring that the office’s workforce has the necessary “effective tools, technology, training and other resources.”
However, these goals truly hinge on that final priority. As SEC Commissioner Caroline Crenshaw has stated, “Our program’s effectiveness depends on providing potential whistleblowers with certainty about how they will be treated, including award eligibility and determinations. It also depends on the efficiency with which we carry it out.”
If these offices are strangled by a lack of resources, then enforcement efforts will only continue to be hindered.
For true change to occur in the immediate, the administration should embrace that sometimes the answer is more (and better targeted) resources, not fewer—a necessary mindset shift that will improve government efficiency and address fraud.
Year after year these offices have collected billions of dollars’ worth of proceeds in aggregate that never would have seen the light of day. And more programs, including those run by the Department of Justice (DOJ) and the Treasury Department Financial Crimes Enforcement Network (FinCEN), are beginning to make waves. Still, the full potential of these programs has not come to fruition.
Now is the perfect time to shift the way we approach eliminating fraud in the U.S. by prioritizing the very people whose sole focus is targeting fraud and waste. And DOGE and the administration, with the help of Congress, can spearhead those efforts.
Dean Zerbe is a partner at Zerbe, Miller, Fingeret, Frank & Jadav LP and is the senior policy analyst for the National Whistleblower Center.
Matthew Beddingfield is a senior associate at Zerbe, Miller, Fingeret, Frank & Jadav LP.
The views expressed in this article are the writers’ own.
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