IRS Whistleblower Program Improvement Act
Officially: “IRS Whistleblower Program Improvement Act” Read the full text
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1Short title; etc
This section says the Act may be called the 'IRS Whistleblower Program Improvement Act.' It states that, unless the Act says otherwise, any amendment described in the Act is an amendment to a section of the Internal Revenue Code of 1986. It defines 'Secretary,' as used throughout the Act, to mean the Secretary of the Treasury or that person's delegate. It also lists the Act's table of contents, naming the six sections of the Act.
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1. Short title; etc (a) Short title This Act may be cited as the IRS Whistleblower Program Improvement Act . (b) Amendment of 1986 code Except as otherwise expressly provided, whenever in this Act an amendment is expressed in terms of an amendment to a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986. (c) References to Secretary For purposes of this Act, the term Secretary means the Secretary of the Treasury or the Secretary's delegate. (d) Table of contents The table of contents of this Act is as follows: Sec. 1. Short title; etc. Sec.
2Standard and scope of review of whistleblower award determinations
This section would change how a whistleblower's award determination is described as reaching the Tax Court under section 7623(b)(4) of the Internal Revenue Code, replacing the word describing that step from being 'appealed to' the Tax Court to being 'reviewed by' the Tax Court, and it would rename the heading of that paragraph from 'Appeal' to 'Review' to match. It would add that any such Tax Court review must be de novo, meaning a fresh, independent review rather than one that defers to the IRS's decision, and that the review must be based on the administrative record that existed at the time of the original award determination plus any additional evidence that is newly discovered or was previously unavailable. These changes would apply to petitions under section 7623(b)(4) that are pending on, or filed on or after, the date this Act becomes law.
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2. Standard and scope of review of whistleblower award determinations. Sec.
3Whistleblower privacy protections
This section would add a new rule to section 7623(b)(6) of the Internal Revenue Code requiring that a whistleblower proceed anonymously in all Tax Court proceedings under the whistleblower award law, even though sections 7458 and 7461 would otherwise apply. The only exception is if the Tax Court finds that a societal interest in disclosing the whistleblower's identity outweighs the potential harm that disclosure could cause the whistleblower. This anonymity rule would apply to petitions filed with the Tax Court that are pending on, or filed on or after, the date this Act becomes law.
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3. Whistleblower privacy protections. Sec.
4Modification of IRS whistleblower report
This section would change the annual IRS whistleblower program report required under section 406(c) of division A of the Tax Relief and Health Care Act of 2006. The report's existing description of the use of whistleblower information must now also include a list and descriptions of the top tax avoidance schemes, up to 10, that whistleblowers disclosed during the year covered by the report. This change would apply to reports for fiscal years ending after this Act becomes law.
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4. Modification of IRS whistleblower report. Sec.
5Interest on whistleblower awards
This section would add a new paragraph (7), on interest, to section 7623(b) of the Internal Revenue Code. If the Secretary of the Treasury has not notified a whistleblower of a preliminary award recommendation before the 'applicable date' (defined below), the whistleblower's award must include interest running from that applicable date, at the overpayment interest rate set under section 6621(a). That interest stops building once the Secretary notifies the individual of a preliminary award recommendation. The 'applicable date' is 12 months after the first date on which both of the following are true: all proceeds from the actions covered by the award recommendation have been collected, and either the deadline for filing a refund claim or lawsuit has expired, or the taxpayers involved and the Secretary have reached final agreement on the tax or other liabilities for the periods at issue and either the taxpayers have waived their right to seek a refund or any refund claim or suit has been resolved. These interest provisions would take effect 180 days after this Act becomes law. If, as of that 180-day date, the Secretary still has not notified the individual of a preliminary award recommendation, and the applicable date described above has already passed, then for that case the applicable date used to calculate interest is instead treated as 12 months after the 180-day effective date, rather than the date it would otherwise have been.
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5. Interest on whistleblower awards. Sec.
6Correction regarding deductions for attorney's fees
This section would amend section 62(a)(21)(A)(i) of the Internal Revenue Code by replacing its cross-reference to 'section 7623(b)' with a cross-reference to 'section 7623.' This removes the limit to subsection (b) specifically, so the above-the-line tax deduction for whistleblower-related attorney's fees and costs under section 62(a)(21) would apply based on section 7623 as a whole rather than only its subsection (b). This change would apply to taxable years ending after the date this Act becomes law.
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6. Correction regarding deductions for attorney’s fees. 2. Standard and scope of review of whistleblower award determinations (a) In general Paragraph (4) of section 7623(b) is amended— (1) by striking appealed to and inserting reviewed by , and (2) by adding at the end the following: Any review by the Tax Court under the preceding sentence shall be de novo and shall be based on the administrative record established at the time of the original determination and any additional newly discovered or previously unavailable evidence. . (b) Conforming amendment The heading of paragraph (4) of section 7623(b) is amended by striking Appeal and inserting Review . (c) Effective date The amendments made by this section shall apply to petitions under section 7623(b)(4) of the Internal Revenue Code of 1986 which are pending on, or filed on or after, the date of the enactment of this Act. 3. Whistleblower privacy protections (a) In general Paragraph (6) of section 7623(b) is amended by adding at the end the following new subparagraph: (D) Whistleblower anonymity before the Tax Court Notwithstanding sections 7458 and 7461, a whistleblower shall proceed anonymously before the Tax Court for all proceedings under this section absent a finding by the Tax Court that a societal interest exists for disclosing the whistleblower’s identity which exceeds the potential harm disclosure could cause to the whistleblower. . (b) Effective date The amendment made by this section shall apply to petitions filed with the Tax Court which are pending on, or filed on or after, the date of the enactment of this Act. 4. Modification of IRS whistleblower report (a) In general Section 406(c) of division A of the Tax Relief and Health Care Act of 2006 is amended by striking such use, in paragraph (1) and inserting such use (which shall include a list and descriptions of the top tax avoidance schemes, not to exceed 10, disclosed by whistleblowers during such year), . (b) Effective date The amendments made by this section shall apply to reports for fiscal years ending after the enactment of this Act. 5. Interest on whistleblower awards (a) In general Section 7623(b) is amended by adding at the end the following new paragraph: (7) Interest (A) In general If the Secretary has not provided notice to an individual described in paragraph (1) of a preliminary award recommendation before the applicable date, the amount of any award under this subsection shall include interest from such date at the overpayment rate under section 6621(a). (B) Exception No interest shall accrue under this paragraph after the date on which the Secretary provides notice to the individual of a preliminary award recommendation. (C) Applicable date For purposes of this paragraph, the applicable date is the date that is 12 months after the first date on which— (i) all of the proceeds resulting from actions subject to the award recommendation have been collected, and (ii) either— (I) the statutory period for filing a claim or suit for refund has expired, or (II) the taxpayers subject to the actions and the Secretary have agreed with finality to the tax or other liabilities for the periods at issue, and either the taxpayers have waived the right to file a claim or suit for refund or any claim or suit for refund has been resolved. . (b) Effective date (1) In general The amendments made by this section shall take effect 180 days after the date of the enactment of this Act. (2) Special rule If, as of the date described in paragraph (1)— (A) the Secretary has not provided notice to the individual of a preliminary award recommendation as described in paragraph (7)(A) of section 7623(b) of the Internal Revenue Code of 1986, as added by this Act, and (B) the applicable date provided in paragraph (7)(C) of such section, as so added, has passed, the applicable date for purposes of such paragraph (7)(C) is the date that is 12 months after the date described in paragraph (1). 6. Correction regarding deductions for attorney's fees (a) In general Section 62(a)(21)(A)(i) is amended by striking 7623(b) and inserting 7623 . (b) Effective date The amendment made by this subsection shall apply to taxable years ending after the date of the enactment of this Act.
Where it is
In the House.