People who tip off the IRS about tax cheats can earn a financial reward, but many report the process is slow, opaque, and personally risky. This bill would change several things: the Tax Court would review disputed whistleblower awards from scratch rather than deferring to the IRS, whistleblowers could generally stay anonymous in court, and the IRS would start paying interest on awards that drag more than a year past when the taxes were actually collected. It would also require the IRS's annual whistleblower report to list the top tax-avoidance schemes flagged that year, and it fixes a cross-reference so attorney fees stay deductible. Supporters argue the changes would encourage more insiders to step forward with information on large-scale tax fraud.
Congressional Summary
IRS Whistleblower Program Improvement ActThis bill modifies provisions of the Internal Revenue Code relating to whistleblower awards and protections.Specifically, the billrevises the standard for review of whistleblower awards in the Tax Court to require a de novo review (rather than the current abuse of discretion review) based on the administrative record established at the time of the whistleblower award determination and any new or previously unavailable evidence,allows whistleblowers anonymity in proceedings before the Tax Court (unless a societal interest in disclosing a whistleblower's identity outweighs potential harm to the whistleblower),modifies the Internal Revenue Service (IRS) whistleblower report to require inclusion of a list and description of up to 10 of the top tax avoidance schemes disclosed by whistleblowers, andrequires payment of interest on mandatory whistleblower awards if the IRS fails to provide timely notice to a whistleblower of an award recommendation.The bill also allows payments of the attorney fees of whistleblowers to be deducted when calculating adjusted gross income for tax purposes regardless of whether the whistleblower award was paid through the mandatory or the discretionary whistleblower award program. (Under current law, the deduction is limited to attorney fees paid in connection with mandatory awards.)
Legislative Subjects
Details
- Congress
- 119th
- Chamber
- House
- Status
- summarized
- Action
- Introduced in House
- Action Date
- 2026-03-17
- Date Added
- 2026-04-23
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