S. 4639

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 4639 Introduced in Senate (IS)]

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119th CONGRESS
2d Session
S. 4639

To provide additional support to whistleblowers who report information 
about noncompliance with Federal tax laws.

_______________________________________________________________________

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.

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''.

SEC. 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.

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 the 
date of enactment of this Act.

SEC. 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.

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 amendments made by this section shall 
apply to reports for fiscal years ending 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 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).

SEC. 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.
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