April 5, 2017

Senators Propose Legislation to Bolster IRS Whistleblower Program

By the C|C Whistleblower Lawyer Team

In an effort to improve the IRS Whistleblower Office, Senator Charles E. Grassley (R-IA) and Senate Finance Committee ranking member Ron Wyden (D-OR) introduced legislation last week to increase communication between the agency and whistleblowers, and to strengthen retaliation protections for tax whistleblowers.

The IRS Whistleblower Improvements Act of 2017 was designed to address concerns with the Whistleblower Office’s handling of claims, including delays in determining awards and statutory misinterpretations that disfavor whistleblowers, according to Bloomberg BNA. “In contrast to other agencies like the SEC or even the Department of Justice under the False Claims Act, both have shown more of a public commitment to whistle-blowers, and have publicized to a high degree that they have whistle-blower awards,” Kathleen Clark, professor at Washington University School of Law told Bloomberg.

The bill would attempt to shift that trend by increasing communication, explicitly allowing the IRS to exchange information with whistleblowers where it would be helpful to an investigation and requiring the agency to provide status updates to whistleblowers.  Sen. Grassley’s news release on the bill says “[w]histleblowers have expressed concern and frustration in their inability to receive information from the IRS on the status of their cases, which may take years to resolve.  Since these individuals often put their livelihoods on the line to come forward, poor communication adds to their anxiety and is a disincentive to others with knowledge of high dollar tax fraud.”

The legislation would also extend anti-retaliation protections to tax whistleblowers that are currently afforded to whistleblowers under laws such as the False Claims Act and Sarbanes-Oxley.

As a next step, the proposed legislation will be assigned to the Finance Committee, of which Grassley is a senior member and Wyden is ranking member.

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