S. 4639

119 S4639 IS: IRS Whistleblower Program Improvement Act
 U.S. Senate
 2026-05-21
 text/xml
 EN
 Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
 II  119th CONGRESS  2d Session  S. 4639  IN THE SENATE OF THE UNITED STATES   May 21, 2026   Mr. Grassley  (for himself and  Mr. Wyden ) introduced the following bill; which was read twice and referred to the  Committee on Finance    A BILL
To provide additional support to whistleblowers who report information about noncompliance with Federal tax laws.
1.
Short title
This Act may be cited as the   IRS Whistleblower Program Improvement Act  .
2.
Standard and scope of review of whistleblower award determinations
(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 petitions 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.
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 the date of enactment of this Act.
4.
Whistleblower privacy protections
(a)
In general
Paragraph (6) of  section 7623(b)  of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:
(D)
Whistleblower anonymity before the Tax Court
Notwithstanding sections 7458 and 7461, a whistleblower shall proceed anonymously before the Tax Court for all proceedings under this section absent a finding by the Tax Court that a societal interest exists for disclosing the whistleblower’s identity which exceeds the potential harm disclosure could cause to the whistleblower.
 .
(b)
Effective date
The amendment made by this section shall apply to petitions filed with the Tax Court which are pending on, or filed on or after, the date of the enactment of this Act.
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 amendments made by this section shall apply to reports for fiscal years ending after the enactment of this Act.
6.
Interest on whistleblower awards
(a)
In general
 Section 7623(b)  of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
(7)
Interest
(A)
In general
If the Secretary has not provided notice to an individual described in paragraph (1) of a preliminary award recommendation 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 recommendation.
(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 recommendation have been collected, and
(ii)
either—
(I)
the statutory period for filing a claim or suit 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 or suit for refund or any claim or suit for refund has been resolved.
 .
(b)
Effective date
(1)
In general
The amendments made by this section shall take effect 180 days after the date of the enactment of this Act.
(2)
Special rule
If, as of the date described in paragraph (1)—
(A)
the Secretary has not provided notice to the individual of a preliminary award recommendation as described in paragraph (7)(A) of  section 7623(b)  of the Internal Revenue Code of 1986, as added by this Act, and
(B)
the applicable date provided in paragraph (7)(C) of such section, as so added, has passed,
 the applicable date for purposes of such paragraph (7)(C) is the date that is 12 months after the date described in paragraph (1).
7.
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.