IRS Whistleblower Program Improvement Act

The IRS Whistleblower Program Improvement Act aims to modernize and streamline the process for individuals who report large-scale tax evasion. Currently, whistleblowers often face significant delays, sometimes waiting over a decade for their financial awards. This bill proposes to hold the IRS accountable by requiring the agency to pay interest on awards that are not processed within one year of the government collecting the owed taxes. It also seeks to ensure that whistleblowers are not financially penalized by clarifying that they can deduct attorney fees from their taxable income.

To better protect those who come forward, the legislation would establish a presumption of anonymity for whistleblowers during Tax Court proceedings. This means their identities would remain confidential unless a judge determines there is a significant public interest in revealing them. Additionally, the bill proposes to change how courts review disputed award amounts. Instead of giving high deference to the IRS's initial decision, the Tax Court would be allowed to conduct a fresh review of all evidence, including new information that was not part of the original agency record.