Senators Chuck Grassley and Ron Wyden have proposed the IRS Whistleblower Improvements Act of 2017 in the U.S. Senate today. If adopted, the law will provide for (1) enhanced communications between the Internal Revenue Service and whistleblowers, and (2) anti-retaliation protections for tax whistleblowers. Both would be significant improvements to the IRS whistleblower program created a decade ago.
Communications between the IRS and whistleblowers have been more difficult to date than other programs because of concerns regarding the protection of taxpayer privacy. Although the law currently provides for confidentiality agreements with whistleblowers, they are not extensively used. The new bill would specifically authorize the IRS to exchange information with whistleblowers where doing so would benefit the investigation. The bill also requires status updates for whistleblowers at critical junctures in the process. It is hoped that these two measures will foster more cooperation between the two parties as they jointly fight tax evasion.
Anti-retaliation protections have been a missing piece in the IRS whistleblower program for some time. Without it, tax whistleblowers who do not fall within an applicable state law or the Sarbanes-Oxley Act (SOX) may find themselves without a legal remedy if they are fired for whistleblowing. Congress has already offered this measure to individuals reporting fraud under both the False Claims Act and the Dodd-Frank Act. It is a simple addition to the law that is long overdue.
Senator Grassley is an experienced participant in the fight for additional protections. He has been a driving force behind whistleblower rewards and protections for some time. The measures described above were previously added by amendment to the Taxpayer Protection Act of 2016. However, that bill was not considered by the U.S. Senate after it passed through the Senate Finance Committee.
We look forward to reading the legislation and supporting it throughout its journey in Congress. It is definitely needed.