IRS Whistleblower Program Rulemaking: Making Tax Whistleblowing Work

The attorneys of Kohn, Kohn & Colapinto know firsthand the power of an effective IRS Whistleblower Program, having represented UBS whistleblower Bradley Birkenfeld in the landmark tax whistleblower case that upended the illegal Swiss banking system.

As part of its pro bono efforts, Kohn, Kohn & Colapinto has filed rulemaking petitions, testified at rulemaking hearings, filed amicus curiae briefs in precedent-setting tax whistleblower cases, and helped push for legislation to improve the efficacy of the IRS Whistleblower Program.

On March 25, 2026, the House Ways and Means Committee voted unanimously to advance H.R. 7959, the IRS Whistleblower Program Improvement Act — bipartisan legislation that Kohn, Kohn & Colapinto helped shape through years of pro bono advocacy alongside whistleblower attorney Dean Zerbe, an author of the original IRS whistleblower law, and the National Whistleblower Center. The bill now heads to the full House for a vote.

KKC continues to work pro bono to see this critically needed reform signed into law. In an earlier article calling for the bill’s passage, KKC founding partner Stephen M. Kohn outlined the need for reform — and following the committee vote, he emphasized the urgency: “It is unacceptable that whistleblowers who risk their careers and suffer retaliation have to wait 11 years to obtain the compensation Congress mandated they obtain. We must now redouble our efforts to have these critically needed bipartisan reforms passed by Congress and signed into law.”

On July 1, 2019, The Taxpayer First Act became law. The Taxpayer First Act closed loopholes in corporate whistleblower protections. For the first time, employees who expose tax fraud, which often include violations of the Bank Secrecy Act and anti-money laundering law, are protected from retaliation.

Summary of Taxpayer First Act anti-retaliation provisions:

• The right to reinstatement and double back-pay;
• No mandatory arbitration;
• Expeditious administrative remedies with the right to go to federal court for a jury trial;
• Compensatory damages such as special damage, attorneys fees, and costs, awarded only to a whistleblower who prevails in an employment case.

The Taxpayer First Act also enhances the existing IRS whistleblower reward program by permitting full and open communication between the IRS Whistleblower Office and whistleblowers. Due to a broad reading of other provisions in the tax code concerning taxpayer secrecy, before this amendment, this type of communication was regularly stifled. The change will facilitate the cooperation between whistleblowers and the IRS necessary to fully prosecute tax frauds.

Kohn, Kohn & Colapinto partners worked closely with whistleblower attorney Dean Zerbe, Senior Policy Analyst at the National Whistleblower Center, and the National Whistleblower Center for several years promoting these reforms.

The modern IRS whistleblower award law (Section 7623(b) of the Internal Revenue Code) was created in 2006 and championed by Senator Charles E. Grassley (R-IA). The law provides that whistleblowers are mandated to receive 15-30% of proceeds collected by the U.S. government due to the information given by the whistleblower. The IRS has also been extremely successful in protecting the confidentiality and anonymity of tax whistleblowers.

The below is a summary of what the IRS has collected over the last five years:

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Source: IRS Whistleblower Program FY 2024 Report
Frequently Asked Questions (FAQs): What is covered under the IRS tax whistleblower reward program?