|
IRS
Whistleblower Provisions of the Tax Relief and Health Care
Act of 2006
Congress has
passed the Tax Relief and Health Care Act of 2006 which
includes "Whistleblower Reform." A Senate Finance
Committee
summary of the
provision
follows:
Whistleblower reforms. Present law authorizes the
IRS to pay such sums as deemed necessary for: (1)
detecting underpayments of tax; and (2) detecting and
bringing to trial and punishing persons guilty of
violating the internal revenue laws or conniving at the
same. Amounts are paid based on a percentage of the tax,
fines, and penalties (but not interest) actually
collected based on the information provided.
The
provision reforms the reward program for individuals who
provide information regarding violations of the tax laws
to the Secretary that involve an individual whose gross
income exceeds $200,000 for any taxable year subject to
such action and that involves tax, penalties, and
interest of over $2 million.
Generally, the provision establishes a reward floor of
15% and a cap of 30% of the collected proceeds
(including penalties, interest, additions to tax and
additional amounts) if the IRS moves forward with an
administrative or judicial action based on information
brought to the IRS’s attention by an individual. Under
certain specified circumstances, the provision permits
awards of lesser amounts. The provision allows an
above-the-line deduction for attorneys’ fees and costs
paid by, or on behalf of, the individual in connection
with any award for providing information regarding
violations of the tax laws. The provision allows the
whistleblower to appeal the award determination with the
Tax Court.
The
provision also creates a Whistleblower Office within the
IRS to administer the reward program. The provision
requires a yearly study and report by the Secretary of
the Treasury. The provision is effective for information
provided on or after the date of enactment. The
provision is estimated to raise $32 million over five
years and $182 million over ten years.
For the complete text of the bill >>
click here
and see pages 44-50 (515 page PDF)
Jim
Moorman, President of Taxpayers Against Fraud, heralded
passage of this important legislation, and congratulated
Sen. Grassley for his diligence in getting this legislation
through Congress. "This is a huge step towards
ferreting out large-scale tax cheats and towards restoring
confidence in the Federal tax system," said Moorman.
"Sen. Grassley's False Claims Act has discouraged those who
cheat the Government on the procurement side, and this law
will help discourage cheats on the tax side as well.
Together, through a combination of legal action and fraud
deterrence, these two pieces of legislation will save the
American people many billions of dollars."
_ _ _ _ _ _
To schedule an interview
with the Jim Moorman, call: Patrick Burns (202)
296-4826 ext. 24 or contact by email at
PBurns@taf.org
|
