Grassley places hold on Treasury nominees over whistleblower concerns

By Peter Schroeder - 07/11/12 04:28 PM ET

Sen. Charles Grassley (R-Iowa) is blocking two Treasury Department nominees over his objections to how the Internal Revenue Service (IRS) is handling its whistleblower program.

Grassley, who sponsored the 2006 bill strengthening that whistleblower program, said Wednesday he planned to hold up two nominees for top Treasury positions until he receives answers on how the IRS is improving the program.

“The IRS could and should be doing a lot more to stop big-dollar tax cheats,” he said. “Progress on the whistleblower office is critical for tax compliance.”

The nominees now in limbo are Mark Mazur, nominated to serve as the Treasury's assistant secretary for tax policy, and Matthew Rutherford to be assistant secretary of the Treasury. Their nominations are pending before the full Senate, after being approved unanimously by the Senate Finance Committee.

On June 21, Grassley sent a letter to Treasury Secretary Timothy Geithner and IRS Commissioner Douglas Shulman, criticizing the office for processing claims at a "snail's pace" and distributing a "shockingly low" amount of awards. He demanded answers to several detailed questions about the work the office has done, and said Wednesday he would hold up the two nominations, which are pending before the Senate Finance Committee, until he gets those answers.

The move marks the latest in a long-running standoff between Grassley and the IRS over the office, as the lawmaker has maintained the agency has limited the program's effectiveness, pointing out it has processed just a handful of rewards since it was expanded.

A May report from the Treasury's inspector general for tax administration said the IRS may need to improve oversight of the program to ensure whistleblower claims are accurate, and to do more to establish a concrete timeline for processing claims.

Under the program, whistleblowers can qualify for awards by supplying information on noncompliance cases involving more than $2 million. The 2006 law also scrapped a $10-million maximum award, and instead implemented a limit based on the amount of revenue collected from the information.