Washington, D.C. February 9, 2018. The Bipartisan Budget Act of 2018, signed into law today by President Trump, included two key whistleblower qui tam amendments fixing loopholes in the IRS and Dodd-Frank Act whistleblower reward laws. The amendments ensure that whistleblowers who expose criminal tax frauds are covered under the IRS whistleblower law, and close a tax loophole that double-taxed Dodd-Frank Act whistleblowers on their rewards, reducing payments by as much as 80%.
We worked for over three years to achieve these victories. When the IRS proposed rules excluding criminal tax fraud recoveries from the IRS qui tam law, we wrote a detailed rulemaking petition opposing those rules. The IRS ignored our augments, and excluded the criminal tax cheats from the tax qui tam law. This had a devastating impact on employees willing to expose criminal tax frauds.
We then challenged the IRS rule in court. We won an historic ruling in the Tax Court, completely discrediting the anti-whistleblower IRS rule. Unfortunately, the IRS appealed that decision, and the case is currently pending in the U.S. Court of Appeals for the District of Columbia Circuit.
We also worked, pro bono, with the National Whistleblower Center, spearheading their pubic campaign to force Congress to act and fix the loopholes that were undermining two of the most of the most important qui tam laws in the United States. Thousands of Americans sent in letters and emails to their Members of Congress. Senator Charles Grassley (R-IA), the Chairman of the Senate Whistleblower Caucus, heeded the call. He introduced two amendments that were approved by the Senate Finance Committee and were eventually included in the Bipartisan Budget Act of 2018.
Those amendments are now law.
The importance of these amendments was fully explained in a statement I issued earlier today as Executive Director of the National Whistleblower Center:
“Today is a great day for whistleblowers and American taxpayers. Thousands of Americans sent letters and emails to their elected representatives demanding that these two devastating loopholes in whistleblower law be fixed. The Chairman of the bi-partisan Senate Whistleblower Caucus, Senator Charles Grassley, forged the bipartisan coalition needed to ensure that whistleblowers are protected. The IRS and Dodd-Frank whistleblower laws are the cornerstone of America’s anti-fraud program. These two amendments breathe new life into these vital laws.”
“The National Whistleblower Center has been working for three years to fix these problems, challenging the anti-whistleblower interpretations in court, mobilizing thousands of citizens to send letters/emails to their representatives, and educating Members of Congress concerning the destructive nature of these two loopholes. Our campaign has been successful.”
A copy of the two whistleblower amendments and the Tax Court opinion are linked here: