ICYMI: The Wall Street Journal looks at Senator Grassley’s work to include a clarification of IRS whistleblower reward provisions in the Senate’s tax reform legislation. You can read the piece here.
 
WSJ: U.S. Senate Tax Plan Includes Gift for Whistleblowers
By Henry Cutter
Nov. 29, 2017
 
A dispute over how much cash the Internal Revenue Service can hand out to those who help it recover money would end with a win for whistleblowers under a provision included in the Senate tax-overhaul plan.
 
The measure, put forward by Sen. Chuck Grassley (R., Iowa), chairman of the Senate Whistleblower Protection Caucus, would make it crystal-clear that all funds collected by the IRS as a result of a whistleblower’s efforts would be available to be shared with that person as a reward.
 
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The IRS has argued in court documents that because the whistleblower law deals only with tax matters, for the purpose of calculating rewards, the amount available to be shared, known as “collected proceeds,” only refers to taxes it would have foregone without a  whistleblower’s help. Including other funds, such as criminal fines and civil forfeitures, would create a conflict between the tax code and other laws that spell out how that money can be used, it says.
 
Whistleblower advocates argue that the pool should also include fines and forfeitures, making the potential payouts to whistleblowers much bigger.
 
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The question is now under review in appellate court in Washington, D.C., in a case that pits the IRS against a couple that helped the agency collect $74 million. Both sides agree that the couple, whose names are redacted from court papers, should receive 24% of the collected proceeds. The agency’s narrow definition would entitle the couple to share in $20 million, but the two argue that the pool of proceeds should also include the remaining $54 million, comprised of criminal fines and civil forfeitures.
 
In a friend-of-the-court brief, Sen. Grassley argues for a broader definition. Noting that he was the principal author of a provision in the IRS Whistleblower Statute establishing mandatory payouts to whistleblowers, he says the law was meant to include awards for criminal fines, forfeitures and funds collected.
 
“This is sort of to clarify any remaining confusion,” a Grassley aide said of the provision in the Senate tax-overhaul plan. “It’s a belt-and-suspenders kind of thing.”
 
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