New England Biz Law Update
A bipartisan group has introduced legislation seeking to shore up protections for whistleblowers under the IRS Whistleblower Program.
Senators Charles Grassley (R-IA), Ron Wyden (D-OR), Roger Wicker (R-MS) and Ben Cardin (D-MD) are sponsoring the IRS Whistleblower Program Improvement Act of 2023.
The IRS whistleblower program has enabled the agency to collect more than $6 billion from wealthy individuals and businesses caught dodging taxes, according to a statement from Grassley’s office. However, the program has been plagued by problems, including reductions and denials of whistleblower awards and a process that takes on average over 11 years to review and award claims.
“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 in a statement. “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.”
Among the provision of the bill, the legislation would:
- Provide for de novo review in appeals heard by the U.S. Tax Court;
- Establish a presumption of anonymity for whistleblowers before the court;
- Exempt whistleblower awards from budget sequestration;
- Provide that interest be paid to awardees if a whistleblower award has not been paid within one year of the IRS collecting all proceeds;
- Bring the tax treatment of attorney fees into line with other whistleblower programs.
“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,” Stephen Kohn, Chairman of the National Whistleblower Center Board of Directors, said in a statement.
Grassley and Wyden introduced a similar bill in 2021.
