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Reps. Kelly, Thompson and Sens. Grassley, Wyden, Wicker, and Cardin Introduce Bipartisan, Bicameral Bill To Strengthen IRS Whistleblower Program

March 3, 2023

WASHINGTON, D.C. -- Today, U.S. Reps. Mike Kelly (R-PA), Chairman of the Ways & Means Subcommittee on Tax, Mike Thompson (D-CA), Ranking Member of the Ways & Means Subcommittee on Tax, along with Sens. Chuck Grassley (R-Iowa), Ron Wyden (D-Ore.), Roger Wicker (R-Ala.) and Ben Cardin (D-Md.) introduced the IRS Whistleblower Program Improvement Act to make commonsense reforms to the Internal Revenue Service’s (IRS) Whistleblower Awards Program.

The IRS’ whistleblower program has enabled the agency to collect more than $6 billion from wealthy individuals and businesses caught dodging taxes. It has 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,” said Rep. Kelly. "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.”

“A strong whistleblower program helps the IRS recoup taxpayer dollars that were lost to tax fraud or tax evasion,” said Rep. Thompson. “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 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,” Sen. 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.”
 
“Whistleblowers play an essential role in helping to identify and root out tax cheating schemes that rip off the American people for huge amounts of money. The numbers show that the IRS whistleblower program works, and my view is the Senate ought to look for every opportunity to improve it,” Sen. Wyden said. “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.”
 
“Congress established the IRS Whistleblower program with the expectation that it would be used to make our existing tax code stronger, but structural problems have kept it from being as effective as it could be,” Sen. Wicker said. “This legislation would help protect whistleblowers and expedite claims so they will continue coming forward with crucial information.”
 
“Everyone must comply with the law. No one likes paying taxes, but they are there for a reason,” Sen. Cardin said. “Our legislation aims to improve one of the critical tools the federal government has to collect unpaid taxes. The Internal Revenue Service Whistleblower Award Program, is designed to respond directly to reported instances of tax non-compliance from individuals and corporations. Tax cheats need to know the system works, and whistleblowers need to know they will be protected from repercussions.”
 

BACKGROUND
The IRS Whistleblower Program Improvement Act includes six measures to bolster the successful program, ensure fairness and protect the whistleblowers who come forward. The legislation would:

  • Provide for De Novo review in appeals heard by the U.S. Tax Court, allowing for new evidence to be admitted to the record;
  • 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.

The IRS Whistleblower Program Improvement Act is supported by the National Whistleblower Center and Taxpayers Against Fraud.

"IRS whistleblowers have been in the doghouse for too long. Long delays have discouraged reporting, and whistleblowers have been denied due process in court. These essential amendments are necessary to insure that millionaires and billionaires who fraudulently hide their wealth offshore will pay their fair share of taxes,” said Stephen Kohn, Chairman of the National Whistleblower Center Board of Directors.
 
“This bill encourages courageous whistleblowers to step forward and expose tax fraud schemes that can often only be uncovered by insiders,” said Jeb White, President of Taxpayers Against Fraud.

You can find the bill text here.