[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4107 Introduced in House (IH)]
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117th CONGRESS
1st Session
H. R. 4107
To amend the Internal Revenue Code of 1986 to modify and reform rules
relating to investigations and whistleblowers, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 23, 2021
Mr. Thompson of California (for himself and Mr. Kelly of Pennsylvania)
introduced the following bill; which was referred to the Committee on
Ways and Means, and in addition to the Committee on the Budget, for a
period to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the
committee concerned
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to modify and reform rules
relating to investigations and whistleblowers, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``IRS Whistleblower Program
Improvement Act of 2021''.
SEC. 2. STANDARD AND SCOPE OF REVIEW OF WHISTLEBLOWER AWARD
DETERMINATION.
(a) In General.--Paragraph (4) of section 7623(b) of the Internal
Revenue Code of 1986 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) of the Internal Revenue Code of 1986 is amended by striking
``Appeal'' and inserting ``Review'',
(c) Effective Date.--The amendments made by this section shall
apply to cases 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. EXEMPTION FROM SEQUESTRATION.
(a) In General.--Section 255 of the Balanced Budget and Emergency
Deficit Control Act of 1985 (2 U.S.C. 905) is amended--
(1) by redesignating subsection (k) as subsection (l); and
(2) by inserting after subsection (j) the following:
``(k) Awards to Whistleblowers.--An award authorized under section
7623 of the Internal Revenue Code of 1986 shall be exempt from
reduction under any order issued under this part.''.
(b) Applicability.--The amendment made by this section shall apply
to any sequestration order issued under the Balanced Budget and
Emergency Deficit Control Act of 1985 (2 U.S.C. 900 et seq.) after
December 31, 2020.
SEC. 4. WHISTLEBLOWER PRIVACY PROTECTIONS.
(a) In General.--Paragraph (4) of section 7623(b) of the Internal
Revenue Code of 1986, as amended by section 2, is further amended--
(1) by striking ``determination.--Any determination'' and
inserting ``determination.--
``(A) In general.--Any determination'', and
(2) by adding at the end the following new subparagraph:
``(B) Presumption of anonymity.--For purposes of
Rule 345(a) of the Tax Court Rules of Practice and
Procedure (as in effect on the date of the enactment of
the IRS Whistleblower Program Improvement Act of 2021),
and any successor rule, with respect to any action
under this paragraph there shall be a rebuttable
presumption that a whistleblower would be subject to
retaliation, physical harm, social and professional
stigma, or economic distress which outweighs the
counterbalancing societal interests in knowing the
whistleblower's identity.''.
(b) Effective Date.--The amendments made by this section shall
apply to petitions filed under Rule 345(a) of the Tax Court Rules of
Practice and Procedure which are pending on, or filed on or after, the
date of the enactment of this Act.
SEC. 5. 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 amendment made by this section shall
apply to reports the due date for which are after the enactment of this
Act.
SEC. 6. INTEREST ON WHISTLEBLOWER AWARDS.
(a) In General.--Section 7623(b) of the Internal Revenue Code of
1986 is amended by redesignating paragraphs (5) and (6) as paragraphs
(6) and (7), respectively, and by inserting after paragraph (5) the
following new paragraph:
``(5) Interest.--
``(A) In general.--If the Secretary has not
provided notice to an individual described in paragraph
(1) of a preliminary award determination 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 determination.
``(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 determination have
been collected, and
``(ii) either--
``(I) the statutory period for
filing a claim 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 for refund or
any claim for refund has been
resolved.''.
(b) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
SEC. 7. RETENTION OF COLLECTED PROCEEDS TO FUND PROGRAM COSTS.
(a) In General.--Section 7623 of the Internal Revenue Code of 1986
is amended by adding at the end the following new subsection:
``(e) Retention of Collected Proceeds to Fund Program Costs.--
``(1) In general.--The Secretary may retain annually up to
3 percent of the amount of proceeds collected as a result of
actions described in subsection (a) (including any related
actions) or from any settlements in response to such actions to
be used for program costs (within the meaning of section
6307(d)(2)) associated with administering the whistleblower
programs under this section, including reimbursing the
applicable divisions of the Internal Revenue Service for costs
associated with investigating whistleblower claims, except that
the amount so retained in any year shall not exceed
$10,000,000. The Secretary shall keep adequate records
regarding amounts so retained and used.
``(2) Coordination rules.--The amount credited as paid by
any taxpayer, and any award to a whistleblower, shall be
determined without regard to this subsection.
``(3) Adjustment for inflation.--In the case of calendar
years beginning after 2022, the $10,000,000 amount in paragraph
(1) shall be increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year in which
the taxable year begins, determined by substituting
`2021' for `2016' in subparagraph (A)(ii) thereof.
If any increase under the preceding sentence is not a multiple
of $10,000, such increase shall be rounded to the next lowest
multiple of $10,000.''.
(b) Effective Date.--The amendment made by this section shall apply
to proceeds collected after the date of the enactment of this Act.
SEC. 8. CORRECTION REGARDING DEDUCTIONS FOR ATTORNEY'S FEES.
(a) In General.--Section 62(a)(21)(A)(i) of the Internal Revenue
Code of 1986 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.
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