Two former chairmen of the Senate Finance Committee have re-introduced legislation to protect tax fraud whistleblowers from retaliation.
Sen. Chuck Grassley, R-Iowa, and Ron Wyden, D-Ore., originally introduced the bill last year as an amendment to the Taxpayer Protection Act of 2016. The Senate Finance Committee approved the amendment last April, but it never passed in the full Senate. The senators are re-introducing the legislation as the IRS Whistleblower Improvements Act of 2017.
The bill would increase communication between the IRS and whistleblowers, while protecting taxpayer privacy, while also giving legal protections to whistleblowers to safeguard them from employers who might retaliate for disclosing tax abuses.
“Whistleblowers are a crucial line of defense against waste, fraud and abuse,” Wyden said in a statement. “This legislation will strengthen protections for employees of companies who come forward to report tax evasion. Empowering these whistleblowers is key to rooting out bad actors who are breaking the law by dodging their taxes.”
The bill would allow the IRS to exchange information with whistleblowers if it’s helpful to an investigation. The IRS would be required to provide status updates to whistleblowers at significant points in the process, and provide further updates at the IRS’s discretion, while making sure to preserve confidentiality. The measure aims to help whistleblowers who have often expressed frustration about the lack of information they receive from the IRS about the status of their cases, which can take years to resolve.
To safeguard whistleblowers from employer retaliation, the bill extends anti-retaliation provisions to IRS whistleblowers currently provided to whistleblowers under other whistleblower laws, such as the False Claims Act and Sarbanes-Oxley. Grassley and Wyden pointed out that tax whistleblowers can often be easily identified within their firms as they would have specific knowledge of the tax fraud.
“Whistleblowers have helped the IRS recover more than $3 billion for the taxpayers that otherwise would have been lost to fraud,” Grassley said in a statement. “Whistleblowers have the potential to help even more. They need assurances that putting their jobs at risk carries protections. They also need better communication about where their cases stand so they’re not sitting in limbo. This bill will offer a welcome mat to those who are too often treated like skunks at a picnic.”
Grassley enacted updates to the IRS whistleblower program in 2006. He and Wyden are two of the founding members of the bipartisan Senate Whistleblower Protection Caucus, with Grassley serving as chairman and Wyden as vice-chairman.
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