# IRS Whistleblower Program Improvement Act of 2021

This bill makes several changes to how the IRS handles people who report tax fraud and other financial crimes. Think of it as updating the rules for the IRS's tip line—making it easier and more rewarding for people to come forward when they know about serious tax violations.

The main changes affect how whistleblowers get paid and protected. Right now, if someone reports tax fraud and the IRS collects money as a result, the whistleblower can receive a reward. But the process for determining that reward can take a long time and involve disputes. This bill makes it easier for whistleblowers to challenge a reward decision in Tax Court if they think they deserve more money. It also adds interest payments to awards if the IRS takes too long to make a decision—specifically, if you don't hear about your preliminary award within a year, the IRS has to pay you interest on top of your eventual reward, similar to how they charge interest on unpaid taxes.

The bill also protects whistleblower privacy. It creates a strong presumption that whistleblowers can remain anonymous in court proceedings because they might face retaliation, harm to their reputation, or financial damage if their identity becomes public. Additionally, the bill ensures that whistleblower awards won't be cut if the government has to make across-the-board budget cuts. It also requires the IRS to include information about the top tax avoidance schemes reported by whistleblowers in their annual reports to Congress, which helps shine a light on emerging fraud tactics.

Finally, the bill allows the IRS to keep a small portion of money it collects from fraud cases—up to 3 percent annually, capped at $10 million—to pay for the costs of running the whistleblower program itself. This helps ensure the program has adequate resources to investigate tips and process awards.

IRS Whistleblower Program Improvement Act of 2021

Thompson, Mike

IRS Whistleblower Program Improvement Act of 2021 This bill modifies provisions of the Internal Revenue Code relating to whistleblower protections. Specifically, the bill	 <ul> <li>revises the standard for review of whistleblower awards in the Tax Court to require a de novo review standard (currently, the standard is abuse of discretion); </li> <li>exempts whistleblower awards from reductions due to budget sequestration; </li> <li>establishes a rebuttable presumption that whistleblowers would suffer harm if their identities were disclosed in a Tax Court proceeding; </li> <li>modifies the Internal Revenue Service (IRS) whistleblower report to require inclusion of a list and description of the top 10 tax avoidance schemes disclosed by whistleblowers;</li> <li>requires the IRS to pay interest on whistleblower awards if not paid within one year of receipt of proceeds collected from whistleblower disclosures, </li> <li>allows the IRS to retain 3% of whistleblower proceeds (up to $10 million) to pay administrative costs of the whistleblower program; and</li> <li>allows payment of the attorney fees of whistleblowers regardless of whether the whistleblower award was paid through the mandatory or the discretionary whistleblower award program.</li> </ul>