WASHINGTON, D.C. | June 15, 2021— Today, Senators Charles Grassley (R-IA) and Ron Wyden (D-OR) introduced the IRS Whistleblower Program Improvement Act of 2021, a bipartisan bill that would ensure the integrity of our nation’s tax system by strengthening and improving the IRS Tax Whistleblower Program.
The National Whistleblower Center (NWC) strongly supports the introduction of this bill and Congress’ efforts to stop tax fraud and protect whistleblowers. By introducing these important reforms to the successful IRS whistleblower awards program, Congress will provide a safer avenue for whistleblowers who wish to come forward to report evidence of tax fraud.
“NWC commends Senator Grassley and Chairman Wyden for their bipartisan leadership in championing these much-needed reforms for the IRS whistleblower program. NWC has long called for improvements in the IRS whistleblower program and is extremely pleased to see today’s legislation introduced. We are hopeful that the bill will be included in any IRS tax administration legislation considered by the Congress this year. Tax whistleblowers often put much at risk to report major tax frauds, helping the government recover millions. It is vital that our country has laws that properly protect and award these whistleblowers for their courage and willingness to come forward,” said Siri Nelson, NWC Executive Director.
“As Congress and the Administration are looking to address the tax gap – improving the IRS whistleblower program must be a key part of that strategy. Study after study has made it clear that supporting and encouraging whistleblowers is vital to the government’s efforts to uncover fraud. The improvements to the IRS whistleblower program contained in the Grassley/Wyden legislation will take this from a star program to an all-star program in the fight against tax cheats,” said Stephen M. Kohn, NWC Board Chairman.
The reforms to the IRS Whistleblower Program put forward in this bill include:
- Provide for De Novo Review of whistleblower decisions in Tax Court;
- Remove sequestration of whistleblower awards;
- Impose interest on whistleblower awards that are subject to significant delay;
- Dedicated funding for the whistleblower office;
- Assume anonymity for whistleblowers appealing to Tax Court;
- Add clarification on deduction of attorney’s fees; and
- Improve annual report to provide greater information on tax evasion to the Congress and the public.
“Tax whistleblowers will be heartened by these improvements which will encourage more knowledgeable and informed tax whistleblowers to come forward. Strengthening the IRS whistleblower program must be part of any serious effort to deal with the tax gap. The IRS whistleblower program has brought in billions of dollars in revenue – far more than was expected when enacted in 2006. However, with these proposed improvements coupled with expansion of IRS examination, the IRS whistleblower program can bring in billions more – directly through examination and indirectly through improved taxpayer compliance. These proposed improvements to the IRS whistleblower program are good news for tax whistleblowers, great news for honest American taxpayers and bad news for tax cheats,” said Dean Zerbe, NWC Senior Analyst and tax whistleblower attorney at Zerbe, Miller, Fingeret, Frank & Jadav.
Whistleblowers have assisted the IRS in collecting over $6 billion from wealthy individuals and companies that were not in compliance with tax laws. However, there has been a clear need for updating the law to ensure tax whistleblowers are protected. In July 2020, NWC wrote to the Senate Finance Committee and House Committee on Ways and Meansrequesting the committee members adopt similar reform measures.
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