Senate bill would strengthen IRS whistleblower rewards and protections

What does this do?

S 4639 changes how courts review IRS whistleblower reward disputes, allowing judges to consider new evidence and conduct a full fresh review of each case. The bill shields whistleblower identities in court unless a judge finds a strong public reason to reveal them. It also fixes a tax deduction rule so whistleblowers can deduct attorneys fees regardless of which legal provision their award falls under.

Who does it affect?

The bill directly affects individuals who report tax law violations to the IRS and are awaiting reward payments, as well as tax attorneys who handle these cases. Taxpayers who are reported and investigated by the IRS are also affected.

Why does it matter?

The changes are intended to make the whistleblower process fairer and safer, which proponents say could encourage more people to report tax fraud. Past sequestration cuts have reduced whistleblower payments, and reward notification delays have gone uncompensated under current law.

What does it cost, and who pays?

If the IRS takes more than 12 months after collecting money from a tax case to notify a whistleblower, the government must pay interest on top of the award. Whistleblower awards would also be shielded from automatic federal budget cuts known as sequestration.

Where does it stand?