Whistleblowers Center Highlights Proposals to Improve Program

December 17, 2018

The Honorable Orrin G. Hatch, Chairman
The Honorable Ron Wyden, Ranking Member
Senate Committee on Finance
219 Dirksen Building
Washington, D.C. 20510

RE: Proposed Amendments for Tax Administration — Improvements in the IRS Whistleblower Program

Dear Chairman Hatch and Ranking Member Wyden:

The National Whistleblower Center (NWC) is recognized as a leading voice for whistleblowers in this country. See www.whistleblowers.org. We are writing to bring to your attention several proposals to strengthen and improve the IRS whistleblower program and ask for their consideration as you work to modernize the IRS, enhance compliance and improve tax administration.

The IRS whistleblower award program has been a resounding success in helping to protect the integrity of our tax system and has resulted in the collection of billions of dollars from those seeking to evade our nation's tax laws. Under the program, awards are only paid if information provided by whistleblowers leads to the collection of revenue that might otherwise go uncollected. The NWC believes that there are some discrete, but critical changes that should be made to make this effective enforcement tool even better.

We are grateful to the Finance Committee — and especially for your leadership — regarding the recent clarification of the whistleblower law related to the definition of “collected proceeds.” This most recent change is already having a profound impact — encouraging whistleblowers to come forward with information about illegal offshore accounts as well as criminal tax evasion. This clarification builds on the great work of the Finance Committee in 2006 to bolster the IRS whistleblower program by mandating whistleblower awards and permitting judicial review.

We have attached a background paper to provide more detail, but in brief, the NWC is proposing the following statutory changes:

• Protect of whistleblowers from retaliation (Grassley/Wyden — included in the Finance Committee S. 3246 Hatch/Wyden — Taxpayers First Act)

• Improve transparency and IRS communications with whistleblowers (Grassley/Wyden — included in the Finance Committee S. 32467 Hatch/Wyden — Taxpayers First Act)

• Clarify that the standard of review of whistleblower cases in Tax Court is de novo.

• Reinforce Congress' expectation that the IRS should make whistleblower awards in a timely manner and that interest will be charged if a preliminary award determination letter is delayed by over 12 months.

• Protect whistleblower identity by clarifying that whistleblowers have a presumption of anonymity in Tax Court.

Thank you for your time and consideration of these proposals. The NWC is happy to assist the Finance Committee as it reviews and evaluates these proposals. The NWC is confident that these changes will make the whistleblower program more effective by encourage more whistleblowers to come forward and streamline the IRS's administration of the program.

Respectfully submitted,

Stephen M. Kohn
Executive Director
National Whistleblower Center
Washington, DC

cc:
Senator Charles Grassley