A bill that would reform the Internal Revenue Service’s (IRS) Whistleblower Awards Program was introduced in Congress this week.
IRS Whistleblower Program Improvement Act was introduced by U.S. Reps. Mike Kelly (R-PA) and Mike Thompson (D-CA), along with Sens. Chuck Grassley (R-IA), Ron Wyden (D-OR), Roger Wicker (R-AL), and Ben Cardin (D-MD).
The bill includes six measures to bolster the successful program, which has enabled the agency to collect more than $6 billion from wealthy individuals and businesses caught dodging taxes. It has also retrieved additional billions through the Offshore Voluntary Disclosure Program, which was created as a direct result of actionable information brought to the IRS by whistleblowers.
“Whistleblowers who bravely report possible violations to the authorities—whether it be to protect taxpayer dollars or promote transparency and accountability at our federal agencies—deserve adequate protections for simply doing the right thing and should be fully protected,” Kelly, chair of the House Ways & Means Subcommittee on Tax, said. “Whistleblowers are essential to ensuring the integrity of our tax laws. Exposing wrongdoing by tax cheats and fraudsters guarantees our voluntary tax system is fair for all Americans.”
The legislation would protect whistleblowers by providing for De Novo review in appeals heard by the U.S. Tax Court, allowing for new evidence to be admitted to the record. It would also establish a presumption of anonymity for whistleblowers before the court; exempt whistleblower awards from budget sequestration; provide that interest be paid to awardees if the whistleblower award has not been paid within one year of the IRS collecting all proceeds; bring the tax treatment of attorney’s fees into line with other whistleblower programs; and improve the program’s annual report to Congress to help tax writers identify areas in most need of attention.
“A strong whistleblower program helps the IRS recoup taxpayer dollars that were lost to tax fraud or tax evasion,” Thompson, ranking member on the tax subcommittee, said. “The IRS Whistleblower Program Improvement Act will help the IRS crackdown on tax cheats. By strengthening this vital program, it will provide an incentive to anonymously report incidents of tax fraud and improve the IRS’s compliance and enforcement efforts while deterring those who seek to exploit the system.”
The bill is supported by the National Whistleblower Center and Taxpayers Against Fraud.
“The IRS Whistleblower Awards Program has a proven track record of success in preventing tax dodgers and fraudsters from cheating the American tax system. Whistleblowers are essential to this process,” Grassley said. “Our bill will provide improved protection and support for whistleblowers so that this program can continue to encourage cooperation in improving compliance and fairness in our tax system.”
Wyden said whistleblowers play a crucial role in rooting out tax cheats that rip off the American people.
“It takes real courage to blow the whistle and help put an end to illegal tax cheating schemes, and our bill will go a long way to strengthen protections for the brave Americans who come forward,” Wyden said.