Revitalize the IRS Whistleblower Program
In recent years, the hugely successful IRS Whistleblower Program has been faltering. The amount of money recovered by the program has plummeted as long delays and other issues have plagued the program which once revolutionized tax enforcement.
The bipartisan IRS Whistleblower Program Improvement Act provides six common sense reforms to revitalize the IRS Whistleblower Program and ensure it can play a pivotal role in cracking down on tax cheats and closing the tax gap.
The IRS Whistleblower Program offers monetary awards and anti-retaliation protections to whistleblowers who report large-scale tax fraud. Since it was established in 2006, the program has become an integral part of the IRS’s enforcement efforts. IRS whistleblowers have allowed the U.S. to recover over $75 billion from wealthy tax cheats and corporations non-compliant with tax law.
Over the past few years, however, the IRS Whistleblower Program has begun to falter. In fiscal year 2018, the program recovered $1.44 billion through enforcement actions sparked by whistleblowers, but the amount recovered per fiscal year has not reached $1 billion since, and has dipped under $200 million at times, over an 80% decrease.
The bipartisan IRS Whistleblower Program would help reverse these trends and revitalize the program. Most importantly, it would require the IRS to pay whistleblowers interest on unnecessarily delayed awards, incentivizing the agency to pay awards on a timely basis.
In addition to addressing infamously long delays plaguing the program, the bill will enhance anonymity protections for tax whistleblowers and establish a de novo standard of review for whistleblower award appeals, allowing the Tax Court to review facts when determining whether an IRS award determination was correct.
In a 2023 article, NWC Chairman of the Board Stephen M. Kohn explained the key provisions of the bill and the overall impact it would have:
“An effective IRS Whistleblower Program is key to the efforts of the United State’s to hold wealthy tax cheats accountable to cut down on the tax gap. By addressing the statutory loopholes currently undermining the program, the IRS Whistleblower Improvement Act goes a long way in ensuring the program is effective.”
Further Reading:
- Advocates Urge Passage, Expansion of the IRS Whistleblower Program Improvement Act
- IRS Whistleblower Program Improvement Act Memo
- Stop Penalizing Heroes, End Double Taxation of Whistleblowers
- Bring Back Income Averaging for Whistleblowers Who are Victims of Retaliation
- A Bipartisan Tax Bill Aims to Close Loopholes in Whistleblower Law
- Bipartisan Bill Offers Critically-Needed Reforms to IRS Whistleblower Program
- A New IRS Budget and (Hopefully) Bright Future for Tax Enforcement
- On Tax Day, Whistleblower Advocates Call for Passage of IRS Whistleblower Improvement Act
- Stay up to date on the IRS Whistleblower Program Improvement Act at Whistleblower Network News
