H.R. 7959: IRS Whistleblower Program Improvement Act

This bill, known as the IRS Whistleblower Program Improvement Act, aims to enhance the protections and incentives for whistleblowers who report tax fraud or tax avoidance schemes to the Internal Revenue Service (IRS). Below is a summary of the key provisions of the bill:

Standard and Scope of Review of Whistleblower Award Determinations

The bill proposes changes to how whistleblower award determinations are reviewed. Instead of being appealed, such cases will be reviewed by the Tax Court. The review will be "de novo," meaning it will be considered fresh without regard to the earlier decision, and will rely on the administrative record and any new evidence not previously available.

Whistleblower Privacy Protections

This section establishes stronger protections for the identities of whistleblowers. It allows whistleblowers to remain anonymous in Tax Court proceedings unless the court determines that revealing their identity serves a significant societal interest that outweighs potential harm to the whistleblower.

Modification of IRS Whistleblower Report

The bill modifies existing reporting requirements for the IRS by requiring the disclosure of the top ten tax avoidance schemes identified by whistleblowers in annual reports. This aims to provide increased visibility into prevalent tax avoidance tactics.

Interest on Whistleblower Awards

Under this provision, if the IRS does not notify a whistleblower about a preliminary award recommendation within a specified time, they will be entitled to interest on their award. The interest would accrue from the date of the award recommendation and would cease once the IRS provides notice to the whistleblower.

Correction Regarding Deductions for Attorney's Fees

This part of the bill clarifies that certain fees paid to attorneys for services related to whistleblower claims can be deducted from taxable income. This change aims to ensure that whistleblowers are not financially burdened after reporting misconduct.

Effective Dates

The amendments made by various sections of the bill will become effective on different timelines, generally applying to petitions or reports filed on or after the bill’s enactment date or after specified periods (like 180 days or 12 months after certain conditions are met).

Relevant Companies

None found.