[Congressional Record Volume 172, Number 73 (Monday, April 27, 2026)]
[House]
[Pages H3104-H3106]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
IRS WHISTLEBLOWER PROGRAM IMPROVEMENT ACT
Mr. SMITH of Missouri. Mr. Speaker, I move to suspend the rules and
pass the bill (H.R. 7959) to amend the Internal Revenue Code of 1986 to
make improvements with respect to the treatment of whistleblowers, and
for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 7959
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; ETC.
(a) Short Title.--This Act may be cited as the ``IRS
Whistleblower Program Improvement Act''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment is expressed in
terms of an amendment to a section or other provision, the
reference shall be considered to be made to a section or
other provision of the Internal Revenue Code of 1986.
(c) References to Secretary.--For purposes of this Act, the
term ``Secretary'' means the Secretary of the Treasury or the
Secretary's delegate.
(d) Table of Contents.--The table of contents of this Act
is as follows:
Sec. 1. Short title; etc.
Sec. 2. Standard and scope of review of whistleblower award
determinations.
Sec. 3. Whistleblower privacy protections.
Sec. 4. Modification of IRS whistleblower report.
Sec. 5. Interest on whistleblower awards.
Sec. 6. Correction regarding deductions for attorney's fees.
SEC. 2. STANDARD AND SCOPE OF REVIEW OF WHISTLEBLOWER AWARD
DETERMINATIONS.
(a) In General.--Paragraph (4) of section 7623(b) is
amended--
(1) by striking ``appealed to'' and inserting ``reviewed
by'', and
(2) by adding at the end the following: ``Any review by the
Tax Court under the preceding sentence shall be de novo and
shall be based on the administrative record established at
the time of the original determination and any additional
newly discovered or previously unavailable evidence.''.
(b) Conforming Amendment.--The heading of paragraph (4) of
section 7623(b) is amended by striking ``Appeal'' and
inserting ``Review''.
(c) Effective Date.--The amendments made by this section
shall apply to petitions under section 7623(b)(4) of the
Internal Revenue Code of 1986 which are pending on, or filed
on or after, the date of the enactment of this Act.
SEC. 3. WHISTLEBLOWER PRIVACY PROTECTIONS.
(a) In General.--Paragraph (6) of section 7623(b) is
amended by adding at the end the following new subparagraph:
``(D) Whistleblower anonymity before the tax court.--
Notwithstanding sections 7458 and 7461, a whistleblower may
elect to proceed anonymously before the Tax Court for all
proceedings under this section absent a finding by the Tax
Court that a societal interest exists for disclosing the
whistleblower's identity which exceeds the potential harm
disclosure could cause to the whistleblower.''.
(b) Effective Date.--The amendments made by this section
shall apply to petitions under section 7623(b)(4) of the
Internal Revenue Code of 1986 which are pending on, or filed
on or after, the date of the enactment of this Act.
SEC. 4. MODIFICATION OF IRS WHISTLEBLOWER REPORT.
(a) In General.--Section 406(c) of division A of the Tax
Relief and Health Care Act of 2006 is amended by striking
``such use,'' in paragraph (1) and inserting ``such use
(which shall include a list and descriptions of the top tax
avoidance schemes, not to exceed 10, disclosed by
whistleblowers during such year),''.
(b) Effective Date.-- The amendments made by this section
shall apply to reports for fiscal years ending after the
enactment of this Act.
SEC. 5. INTEREST ON WHISTLEBLOWER AWARDS.
(a) In General.--Section 7623(b) is amended by adding at
the end the following new paragraph:
``(7) Interest.--
``(A) In general.--If the Secretary has not provided notice
to an individual described in paragraph (1) of a preliminary
award recommendation before the applicable date, the amount
of any award under this subsection shall include interest
from such date at the overpayment rate under section 6621(a).
``(B) Exception.--No interest shall accrue under this
paragraph after the date on which the Secretary provides
notice to the individual of a preliminary award
recommendation.
``(C) Applicable date.--For purposes of this paragraph, the
applicable date is the date that is 12 months after the first
date on which--
``(i) all of the proceeds resulting from actions subject to
the award recommendation have been collected, and
``(ii) either--
``(I) the statutory period for filing a claim or suit for
refund has expired, or
``(II) the taxpayers subject to the actions and the
Secretary have agreed with finality to the tax or other
liabilities for the periods at issue, and either the
taxpayers have waived the right to file a claim or suit for
refund or any claim or suit for refund has been resolved.''.
(b) Effective Date.--
(1) In general.--The amendments made by this section shall
take effect 180 days after the date of the enactment of this
Act.
(2) Special rule.--If, as of the date described in
paragraph (1)--
(A) the Secretary has not provided notice to the individual
of a preliminary award recommendation as described in
paragraph (7)(A) of section 7623(b) of the Internal Revenue
Code of 1986, as added by this Act, and
(B) the applicable date provided in paragraph (7)(C) of
such section, as so added, has passed,
the applicable date for purposes of such paragraph (7)(C) is
the date that is 12 months after the date described in
paragraph (1).
SEC. 6. CORRECTION REGARDING DEDUCTIONS FOR ATTORNEY'S FEES.
(a) In General.--Section 62(a)(21)(A)(i) is amended by
striking ``7623(b)'' and inserting ``7623''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years ending after the date of the
enactment of this Act.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Missouri (Mr. Smith) and the gentleman from California (Mr. Thompson)
each will control 20 minutes.
The Chair recognizes the gentleman from Missouri.
general leave
Mr. SMITH of Missouri. Mr. Speaker, I ask unanimous consent that all
Members may have 5 legislative days to revise and extend their remarks
and include extraneous material on this bill under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Missouri?
There was no objection.
Mr. SMITH of Missouri. Mr. Speaker, I yield myself such time as I may
consume.
[[Page H3105]]
Mr. Speaker, I rise in support of H.R. 7959, the IRS Whistleblower
Program Improvement Act, bipartisan legislation introduced by the Ways
and Means Tax Subcommittee chairman, Mr. Mike Kelly, and the
subcommittee's ranking member, Mr. Mike Thompson.
The IRS relies in part upon whistleblowers who have the courage to
report bad actors who are committing tax fraud, tax evasion, and other
similar crimes they witness occurring in the private sector.
The IRS Whistleblower Program is one of the many government efforts
that is crucial to combat the epidemic of fraud and stop bad actors
from stealing hard-earned dollars from American taxpayers. Since 2007,
this program has led to the collection of over $7 billion in unpaid
taxes.
At a time when it appears we need a comprehensive approach to
combating fraud across various government programs, Ways and Means Tax
Subcommittee Chairman Kelly is building on his longstanding commitment
to reform and improve the IRS Whistleblower Program to better protect
whistleblowers and appropriately reward them for their contributions to
combating fraud.
Mr. Speaker, I reserve the balance of my time.
Mr. THOMPSON of California. Mr. Speaker, I yield myself such time as
I may consume.
Mr. Speaker, I rise in support of this bipartisan legislation and
thank my colleague Mike Kelly for working with me on this effort. Our
bill is a good one.
Mr. Speaker, let's be honest about where we are right now. We ask
Americans to comply with one of the most complex tax systems in the
world. We expect them to report accurately, pay what they owe, and
follow the rules to the letter. The vast majority of Americans do
exactly that, but we also know that there are individuals and entities
who exploit that complexity to cheat the system. They hide income,
manipulate structures, and take advantage of gaps that ordinary
taxpayers would never even know exist. Too often, they get away with
it.
At the same time, the enforcement side of the equation is under real
strain. Between staffing losses and reduced enforcement capacity, the
reality is that the system is not catching everything that it should.
Whether we say it out loud or not, we are increasingly relying on
whistleblowers to help fill that gap. These are the people on the
inside. They are the people who see the fraud firsthand and are willing
to step forward and take a risk to do the right thing. If that is the
system we are operating under, then it has to be a system that actually
works, and right now, it doesn't.
Whistleblowers face uncertainty. They face long delays and, in some
cases, face real personal and professional risks just for coming
forward. That is not how you encourage people to expose wrongdoing.
That is how you discourage it.
This bill makes targeted improvements to fix those problems. First,
it protects whistleblower privacy. If someone is exposing tax fraud,
they should not have to fear retaliation or public exposure just to be
heard.
Second, it strengthens fairness in the process. It ensures that
whistleblowers receive meaningful, independent review of their claims,
not just a rubberstamp of prior decisions.
Third, it addresses delays head-on. When the government takes too
long to act, whistleblowers should not be the ones paying the price.
Providing interest on delayed awards is not a bonus. It is basic
fairness.
This is about making sure the rules we already have are actually
enforced because when tax cheats get away with it, everyone else pays
more or gets less. When whistleblowers are ignored, discouraged, or
exposed, fewer people will come forward the next time. That is how you
undermine confidence in the entire system.
If we want a tax system that is fair, enforcement has to be credible.
If enforcement depends, in part, on whistleblowers, then we need to
treat them like they matter. This bill does exactly that.
Mr. Speaker, I thank Mr. Kelly for his good work and urge a ``yes''
vote.
Mr. Speaker, I reserve the balance of my time.
Mr. SMITH of Missouri. Mr. Speaker, I yield such time as he may
consume to the gentleman from Pennsylvania (Mr. Kelly), the sponsor of
this legislation and our Ways and Means Tax Subcommittee chairman, who
has fought for some time to make these reforms to improve efforts to
combat fraud.
Mr. KELLY of Pennsylvania. Mr. Speaker, I rise today to speak in
support of the IRS Whistleblower Program Improvement Act.
Mr. Speaker, I thank my colleague and counterpart on tax policy, Mr.
Thompson. We worked very closely on this. We have a genuine concern
that we get this right, so the American people understand that we are
not overlooking what is taking place.
Mr. Speaker, I also thank our committee chairman for his recognition
of the important role whistleblowers play at the IRS and his support
for getting the bill before the House today.
Our tax system depends on voluntary compliance, and that only works
when Americans trust that the system is fair and enforced evenly. When
bad actors cheat and get away with it, that trust erodes for everyone
else who plays by the rules.
The IRS Whistleblower Program Improvement Act builds on a proven
program that delivers results for our taxpayers. Since 2007, the
program has recovered more than $7.37 billion in unpaid taxes,
narrowing the tax gap and holding bad actors accountable.
{time} 1540
This is real money returned to the Treasury that would otherwise have
been lost. In many cases, these are complex, high-dollar schemes that
would not have been identified without insider information, proving
that whistleblowers play an essential role in upholding the integrity
of our tax code.
When individuals come forward to expose wrongdoing by tax cheats and
fraudsters, they help to ensure our volunteer tax system remains fair
for all Americans.
The IRS cannot fully close the tax gap through traditional audits
alone. The IRS Whistleblower Program leverages insider knowledge to
identify noncompliance that would otherwise have gone undetected.
Whistleblowers help the IRS to target enforcement resources toward
high-value cases, improving efficiency and accountability across the
system. This program directs those resources toward the highest-value,
highest-probability cases, maximizing the impact and improving
efficiency. It allows the IRS to focus on those who are actively
evading taxes, rather than casting a wide net over the vast majority of
Americans who are trying to comply with the law.
Strengthening this program is a commonsense way to increase the
return on an investment and recovering more unpaid taxes without
expanding broad-based enforcement. Just as important, the program
serves as a powerful deterrent, discouraging sophisticated tax evasion
before it happens by increasing the likelihood that it would be
exposed.
Mr. Speaker, this bill reinforces the program's foundation with
targeted, practical updates by ensuring that the U.S. Tax Court can
consider all relevant evidence by providing a more favorable standard
of review in whistleblower appeals, establishing a presumption of
anonymity for whistleblowers to help protect individuals from
retaliation, encouraging timely administration from the IRS by
requiring the payment of interest on delayed awards, strengthening
transparency and oversight by improving reporting to Congress and
allowing administrative review of award determinations, and aligning
the tax treatment of attorneys' fees for whistleblowers with other
whistleblower programs.
These reforms keep the program focused, predictable, and effective,
addressing longstanding delays and improving program credibility.
Mr. Speaker, I thank the Ways and Means Committee staff on both sides
of the aisle for working so hard on this because they did a great job,
not just for Mr. Thompson and myself but for all of the taxpayers. The
American taxpayers deserve this oversight, and I am glad we are working
on it. Mr. Thompson did a great job.
This bill passed out of the Ways and Means Committee last month with
unanimous support, reflecting broad agreement on the need to strengthen
this program. Ensuring a fair shake for all taxpayers is what it comes
down to.
I thank the National Whistleblower Center, Empower Oversight,
Taxpayers
[[Page H3106]]
Against Fraud, the National Taxpayers Union, and other organizations
who have spoken out in support of this bill. A strong whistleblower
program is essential to a credible tax system, one that rewards
honesty, deters misconduct, and holds bad actors accountable.
Mr. Speaker, I urge my colleagues to support the bill.
Mr. THOMPSON of California. Mr. Speaker, I yield myself the balance
of my time.
Mr. Speaker, I thank Chairman Smith, Mr. Kelly, and Ranking Member
Neal for the good work that was done. I concur with Mr. Kelly that
staff on both sides have done, as always, a fantastic job.
Mr. Speaker, this bill comes down to fairness and enforcement. When
people cheat the tax system and get away with it, honest taxpayers are
the ones who pay the price. If we expect whistleblowers to help close
the gap, we need to protect them, treat them fairly, and ensure that
the system works.
This is a practical, bipartisan step to strengthening enforcement and
restoring confidence in the system.
Mr. Speaker, I urge my colleagues to support this bill, and I yield
back the balance of my time.
Mr. SMITH of Missouri. Mr. Speaker, I yield myself the balance of my
time.
Mr. Speaker, whistleblowers play a critical role in government
oversight, whether it be uncovering bad actors within government or, in
the case of the IRS Whistleblower Program, alerting the IRS to those in
the private sector who are defrauding American taxpayers.
This Congress, the Ways and Means Committee and this administration
have made combating fraud a key priority, and I welcome this
opportunity to strengthen and impose a key tool in that effort.
Mr. Speaker, I encourage my colleagues to support this legislation,
and I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Missouri (Mr. Smith) that the House suspend the rules
and pass the bill, H.R. 7959, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. SMITH of Missouri. Mr. Speaker, on that I demand the yeas and
nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this motion will be postponed.
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