Just moments ago, the House Ways and Means Committee voted unanimously to recommend H.R. 7959, the IRS Whistleblower Program Improvement Act, to the House of Representatives. This vote means that Ways and Means supports a vote by the full House in support of H.R. 7959, and is a critical step towards the bill eventually being passed into law.
“The passage of this legislation – with a unanimous, bipartisan vote – is a strong signal to the IRS that Congress fully supports the IRS making greater use of the tax whistleblower program,” said Dean Zerbe, an author of the original IRS whistleblower program law and a leading attorney for tax whistleblowers. “The tax whistleblower program has proven highly successful – bringing in billions of dollars from tax cheats while targeting limited IRS resources on bad actors.”
The IRS Whistleblower Programs requires that whistleblowers who submit original information to the IRS leading to successful enforcement against tax fraud receive an award of between 15% and 30% of the sanctions collected by the government. Since its inception, the program has led to government recoveries of over $7.5 billion in tax fraud cases.
However, the program’s efficacy has recently been stifled by delays. Whistleblowers now wait an average of eleven years between submitting an award application and receiving their award.
H.R. 7959 will address this issue by requiring the IRS to pay interest on unnecessarily delayed awards. Representative Mike Thompson (D-CA), a co-sponsor of the bill, described the change as “basic fairness.”
“When the government drags its feet,” said Thompson, “whistleblowers should not be the ones paying the price.”
Additionally, the bill will establish a de novo standard of review for whistleblower award appeals, allowing the Tax Court to look at the facts of a case when determining whether an award was decided correctly, and will improve confidentiality protections for IRS whistleblowers.
In his opening statement on the bill, Representative Mike Kelly (R-PA), another co-sponsor, stated: “Whistleblowers play an essential role in upholding the integrity of our tax laws. When individuals come forward to expose wrongdoing by tax cheats and fraudsters, they help ensure our tax system remains fair for all Americans.”
Stephen M. Kohn, Chairman of the Board of the National Whistleblower Center, called the vote “a major step forward in ending terrible delays facing tax whistleblowers,” but also highlighted that more work remains to be done before the bill can go into effect.
“It is unacceptable that whistleblowers who risk their careers and suffer retaliation have to wait 11 years to obtain the compensation Congress mandated they obtain,” Kohn said. “We must now redouble our efforts to have these critically needed bipartisan reforms passed by Congress and signed into law.”
