Summary
Makes the IRS program for people who report tax cheating fairer by improving court reviews, protecting privacy, and adding interest to late reward payments.
What problem does this solve?
People who report tax cheating often face long delays, risk having their identity revealed, and have limited options if the IRS denies their reward. This bill gives whistleblowers better privacy in court, a fairer review process, and requires the IRS to pay interest on delayed reward payments.
What does this bill do?
Reference
Text:
Section:
Sec. 2(a)(2)
Header:
Standard and scope of review of whistleblower award determinations
Creates a fairer court review process
Changes the Tax Court's review of whistleblower award cases to be a fresh look ('de novo'). The court can consider the original case file plus new evidence that was not available before.
Protects whistleblower privacy in court
Allows a whistleblower to choose to remain anonymous during all Tax Court proceedings. A court can only reveal their identity if there is a very strong public reason to do so.
Adds interest to delayed reward payments
Requires the IRS to pay interest on a whistleblower's award if the agency takes more than one year to issue a preliminary reward notice after the case is finalized and the money is collected.
Expands tax deductions for attorney's fees
Fixes a rule to make sure whistleblowers can deduct their attorney's fees from their income for all types of IRS whistleblower awards, not just certain ones.
Requires public reporting on tax schemes
Makes the IRS include a list of the top 10 tax avoidance schemes uncovered by whistleblowers in its yearly report to Congress.
Who does this affect?
- IRS Whistleblowers
- Taxpayers committing fraud
- Tax attorneys
What is the real world impact?
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Encourages reporting of tax fraud
Makes the process of reporting tax cheating safer and more financially certain. This should encourage more people with knowledge of major tax evasion to come forward.
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Ensures fair treatment for whistleblowers
Gives whistleblowers a more just process by allowing for a fresh review of their case in Tax Court and letting them remain anonymous. It also compensates them with interest for long delays in receiving their reward.
When does this start?
Different parts of this bill would take effect at different times, including immediately, 180 days after becoming law, and at the end of the next tax year.
Court review and privacy changes
The new rules for court reviews and whistleblower anonymity apply to all cases that are already in court or are filed after the bill becomes law.
Interest on delayed payments
The requirement for the IRS to pay interest on delayed awards starts 180 days after the bill becomes law.
Attorney fee deduction
The change allowing for the deduction of attorney's fees applies to all tax years that end after the bill becomes law.
IRS reporting on tax schemes
The new requirement for the IRS annual report applies to all reports for fiscal years that end after the bill becomes law.