H.R. 7959 Amendment to IRS Whistleblower Program Improvement Act
Summary
H.R. 7959, the IRS Whistleblower Program Improvement Act, proposes six substantive amendments to the Internal Revenue Code affecting whistleblower proceedings. The bill shifts Tax Court review of whistleblower award determinations from an 'appealed to' standard to de novo review based on the administrative record, adds mandatory anonymity protections for whistleblowers absent a finding that societal interest exceeds potential harm, modifies annual IRS whistleblower reports to include descriptions of the top 10 tax avoidance schemes disclosed, and establishes interest accrual on awards at the section 6621(a) overpayment rate if preliminary award notices are delayed beyond applicable dates.
Whistleblower practitioners and tax controversy attorneys should note that the shift from 'appealed to' to de novo review is substantive — it means Tax Court proceedings under section 7623(b)(4) will permit newly discovered or previously unavailable evidence, changing litigation strategy and potential settlement leverage. Firms with internal compliance reporting mechanisms should also assess whether the anonymity provision and mandatory reporting of top tax avoidance schemes alters their risk calculus for encouraging or discouraging internal disclosures to the IRS.
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GovPing monitors House Floor Schedule for new government & legislation regulatory changes. Every update since tracking began is archived, classified, and available as free RSS or email alerts — 34 changes logged to date.
What changed
The amendment proposes six sections modifying the IRS whistleblower framework under Internal Revenue Code section 7623. Section 2 converts Tax Court review of whistleblower award determinations from an 'appealed to' standard to de novo review based on the administrative record plus any newly discovered or previously unavailable evidence. Section 3 creates whistleblower anonymity rights before the Tax Court unless the court finds societal interest in disclosure exceeds potential whistleblower harm. Section 4 requires the annual IRS whistleblower report to include descriptions of the top 10 disclosed tax avoidance schemes. Section 5 mandates interest on awards at the overpayment rate under section 6621(a) if preliminary award notices are not provided within 12 months of certain specified conditions being met. Section 6 corrects an erroneous cross-reference in the attorney's fees deduction provision.
Tax practitioners and whistleblower attorneys should note that de novo review significantly changes litigation strategy compared to the prior 'appealed to' standard, as it permits consideration of newly discovered evidence rather than limiting review to the original administrative record. The anonymity provision may increase whistleblower willingness to report by reducing retaliation risk. Financial professionals advising clients on whistleblower matters should monitor the bill's progress, as interest accrual provisions could materially affect award calculations in delayed proceedings.
Archived snapshot
Apr 27, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
N S AMENDMENT IN THEOATURE OF A TUBSTITUTE H.R. 7959 TO M. S M FFERED BYRMITH OF ISSOURI
Strike all after the enacting clause and insert the following:
SECTION 1. SHORT TITLE; ETC. 1
.--This Act may be cited as the 2(a) SHORTITLE ''IRS Whistleblower Program Improvement Act''. 3 .--Except as other-4(b) A1986 CMENDMENT OF ODE wise expressly provided, whenever in this Act an amend-5 ment is expressed in terms of an amendment to a section 6 or other provision, the reference shall be considered to be 7 made to a section or other provision of the Internal Rev-8 enue Code of 1986. 9 .--For purposes of 10(c) RSEFERENCES TO ECRETARY this Act, the term ''Secretary'' means the Secretary of the 11 Treasury or the Secretary's delegate. 12 .--The table of contents of 13(d) TCABLE OFONTENTS this Act is as follows: 14
Sec. 1. Short title; etc. Sec. 2. Standard and scope of review of whistleblower award determinations. Sec. 3. Whistleblower privacy protections. Sec. 4. Modification of IRS whistleblower report. Sec. 5. Interest on whistleblower awards. Sec. 6. Correction regarding deductions for attorney's fees.
SEC. 2. STANDARD AND SCOPE OF REVIEW OF WHISTLE-1 BLOWER AWARD DETERMINATIONS. 2
.--Paragraph (4) of section 7623(b) 3(a) INENERAL is amended-- 4 (1) by striking ''appealed to'' and inserting ''re-5 viewed by'', and 6 (2) by adding at the end the following: ''Any re-7 view by the Tax Court under the preceding sentence 8 shall be de novo and shall be based on the adminis-9 trative record established at the time of the original 10 determination and any additional newly discovered 11 or previously unavailable evidence.''. 12 .--The heading of 13(b) CAGONFORMING GMENDMENT paragraph (4) of section 7623(b) is amended by striking 14 ''. 15''A'' and inserting ''RPPEAL EVIEW .--The amendments made by 16(c) EDFFECTIVEATE this section shall apply to petitions under section 17 7623(b)(4) of the Internal Revenue Code of 1986 which 18 are pending on, or filed on or after, the date of the enact-19 ment of this Act. 20
SEC. 3. WHISTLEBLOWER PRIVACY PROTECTIONS. 21
.--Paragraph (6) of section 7623(b) 22(a) INENERAL is amended by adding at the end the following new sub-23 paragraph: 24 -25''(D) WHISTLEBLOWER ANONYMITY BE .--Notwithstanding sec-26FORE THE TAX COURT
tions 7458 and 7461, a whistleblower shall pro-1 ceed anonymously before the Tax Court for all 2 proceedings under this section absent a finding 3 by the Tax Court that a societal interest exists 4 for disclosing the whistleblower's identity which 5 exceeds the potential harm disclosure could 6 cause to the whistleblower.''. 7 .--The amendment made by 8(b) E DGFFECTIVE GATE this section shall apply to petitions filed with the Tax 9 Court which are pending on, or filed on or after, the date 10 of the enactment of this Act. 11
SEC. 4. MODIFICATION OF IRS WHISTLEBLOWER REPORT. 12
.--Section 406(c) of division A of the 13(a) INENERAL Tax Relief and Health Care Act of 2006 is amended by 14 striking ''such use,'' in paragraph (1) and inserting ''such 15 use (which shall include a list and descriptions of the top 16 tax avoidance schemes, not to exceed 10, disclosed by 17 whistleblowers during such year),''. 18 .-- The amendments made by 19(b) EDFFECTIVEATE this section shall apply to reports for fiscal years ending 20 after the enactment of this Act. 21
SEC. 5. INTEREST ON WHISTLEBLOWER AWARDS. 22
.--Section 7623(b) is amended by 23(a) INENERAL adding at the end the following new paragraph: 24 .-- 25''(7) INTEREST
.--If the Secretary has 1''(A) IN GENERAL not provided notice to an individual described in 2 paragraph (1) of a preliminary award rec-3 ommendation before the applicable date, the 4 amount of any award under this subsection 5 shall include interest from such date at the 6 overpayment rate under section 6621(a). 7 .--No interest shall ac-8''(B) EXCEPTION crue under this paragraph after the date on 9 which the Secretary provides notice to the indi-10 vidual of a preliminary award recommendation. 11 .--For purposes of 12''(C) APPLICABLE DATE this paragraph, the applicable date is the date 13 that is 12 months after the first date on 14 which-- 15 ''(i) all of the proceeds resulting from 16 actions subject to the award recommenda-17 tion have been collected, and 18 ''(ii) either-- 19 ''(I) the statutory period for fil-20 ing a claim or suit for refund has ex-21 pired, or 22 ''(II) the taxpayers subject to the 23 actions and the Secretary have agreed 24 with finality to the tax or other liabil-25
ities for the periods at issue, and ei-1 ther the taxpayers have waived the 2 right to file a claim or suit for refund 3 or any claim or suit for refund has 4 been resolved.''. 5 .-- 6(b) EFFECTIVEATE .--The amendments made by 7(1) IN GENERAL this section shall take effect 180 days after the date 8 of the enactment of this Act. 9 .--If, as of the date de-10(2) SDPECIAL RULE scribed in paragraph (1)-- 11 (A) the Secretary has not provided notice 12 to the individual of a preliminary award rec-13 ommendation as described in paragraph (7)(A) 14 of section 7623(b) of the Internal Revenue 15 Code of 1986, as added by this Act, and 16 (B) the applicable date provided in para-17 graph (7)(C) of such section, as so added, has 18 passed, 19 the applicable date for purposes of such paragraph 20 (7)(C) is the date that is 12 months after the date 21 described in paragraph (1). 22
SEC. 6. CORRECTION REGARDING DEDUCTIONS FOR AT-1 TORNEY'S FEES. 2
.--Section 62(a)(21)(A)(i) is amend-3(a) INENERAL ed by striking ''7623(b)'' and inserting ''7623''. 4 .--The amendment made by 5(b) EGFFECTIVEDATE this section shall apply to taxable years ending after the 6 date of the enactment of this Act. 7
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