Kelly legislation to strengthen IRS Whistleblower Program passes Ways & Means Committee, advances to U.S. House vote

WASHINGTON, D.C. -- Today, the Ways & Means Committee advanced legislation introduced by U.S. Representatives Mike Kelly (R-PA), Chairman of the Ways & Means Subcommittee on Tax, Mike Thompson (D-CA), Ranking Member of the Ways & Means Subcommittee on Tax, to make commonsense reforms to the Internal Revenue Service's (IRS) Whistleblower Awards Program.

The legislation, the IRS Whistleblower Program Improvement Act passed by unanimous consent. It now advances to the full U.S. House of Representatives for consideration.

"Today's vote is a win for the American taxpayer and the American worker," said Rep. Kelly. "Our commonsense, bipartisan legislation ensures the integrity of our Nation's tax laws. Exposing wrongdoing by tax cheats and fraudsters guarantees our voluntary tax system is fair for all Americans."

"A strong whistleblower program helps the IRS recoup taxpayer dollars that were lost to tax fraud or tax evasion," said Rep. Thompson. "The IRS Whistleblower Program Improvement Act will help the IRS crackdown on tax cheats. By strengthening this vital program, it will provide an incentive to anonymously report incidents of tax fraud and improve the IRS's compliance and enforcement efforts while deterring those who seek to exploit the system. I'm glad that this important bill has now passed through our committee. Next, we will work to get Speaker Johnson to bring it up for a vote by the full Congress."

"The IRS Whistleblower Program is an essential part of protecting the integrity of America's tax system," said Ways and Means Committee Chairman Jason Smith (MO-08). "We must ensure those that come forward with allegations and evidence of wrongdoing are protected and rightly rewarded for their courage to expose tax fraud, and Ways and Means Tax Subcommittee Chairman Kelly's legislation does just that. Chairman Kelly has a track record of fighting on behalf of taxpayers - including long-standing, bipartisan work to improve the IRS Whistleblower Program. I commend him for continuing to shine a light on needed reforms not only to the tax code but to tax code enforcement as well."

The IRS' whistleblower program has enabled the agency to collect more than $7.5 billion from individuals and businesses caught dodging taxes. It has retrieved additional billions through the Offshore Voluntary Disclosure Program, which was created as a direct result of actionable information brought to the IRS by whistleblowers.

Watch Rep. Kelly's opening statement here.

BACKGROUND

The IRS Whistleblower Program Improvement Act includes six measures to bolster the successful program, ensure fairness and protect the whistleblowers who come forward. The legislation would:

• Provide for De Novo review in appeals heard by the U.S. Tax Court, allowing for new evidence to be admitted to the record;
• Establish a presumption of anonymity for whistleblowers before the court;
• Provide that interest be paid to awardees if the whistleblower award has not been paid within one year of the IRS collecting all proceeds;
• Bring the tax treatment of attorney's fees into line with other whistleblower programs; and
  Improve the program's annual report to Congress to help tax writers identify areas in most need of attention.

The Kelly-Thompson legislation is supported by the National Whistleblower Center.

You can find the bill text here and a section-by-section here.