Don't Mess With Taxes

Sometimes the only way to catch wrongdoers and end abuse is by getting inside information. But whistleblowers often are fearful of coming forward, despite myriad laws designed to protect those who come forward.

These protections were enacted for the most part in the Whistleblower Protection Act, enacted in 1989. While it focused on federal employees, the Occupations Safety and Health Administration (OSHA) created the Whistleblower Protection Program to enforce existing statutes that prevent employers from retaliating or discriminating against a whistleblower.

Now some U.S. Senators are looking to update the 35-year-old law, specifically with regard to federal employee whistleblowers who provide information to Congress.

New whistleblower bill: Sen. Richard Blumenthal (D-Connecticut) on July 10 introduced the Congressional Whistleblower Protection Act to shield federal employees who report information to Congress from retaliation.

Under current law, federal employees are guaranteed the right to petition or provide information to Congress. However, without adequate protections in place, individuals who do so can face termination or retaliation, Blumenthal said in announcing the bill.

“Whistleblowers must be protected against retaliation when they bravely reveal waste, fraud, and abuse,” said Blumenthal. “This measure will strengthen safeguards for anyone reporting government misconduct and empower them to seek relief if they face retaliation. Congressional whistleblowers are essential to our democracy, and they deserve vigorous protection.”

If enacted, the bill would, among other things, give federal whistleblowers the right to access courts. That option has been denied since 1983, when the U.S. Supreme Court decided in Bush v. Lucas that the administrative system created by the 1978 Civil Service Reform Act (CSRA) fully replaced federal employees’ pre-existing right to court access.

Ten of Blumenthal’s colleagues joined as original cosponsors. They are Democratic Sens. Tammy Baldwin of Wisconsin, Catherine Cortez Masto of Nevada, Mazie Hirono of Hawai'i, Amy Klobuchar of Minnesota, Ed Markey of Massachusetts, Alex Padilla of California, Chris Van Hollen of Maryland, Sheldon Whitehouse of Rhode Island, Ron Wyden of Oregon, and Vermont Independent Sen. Bernie Sanders.

Whistleblower groups agree: The bill also got support from groups beyond Capitol Hill.

“Whistleblowers are absolutely essential to exposing executive branch abuse of power and allowing Congress to fully exercise its oversight and legislative authorities,” said Joe Spielberger, policy counsel at the Project on Government Oversight (POGO). “However, without real enforceability against retaliation, they are often left hung out to dry simply for exercising their rights.”

“Federal whistleblowers are essential to maintaining accountability and transparency within the government,” said David Williams, president of the Taxpayers Protection Alliance. “Checks and balances cannot be upheld without information flowing to Congress. Without protection for whistleblowers, that information halts and puts billions of taxpayer dollars at risk. The Congressional Whistleblower Protection Act shields people who disclose government wrongdoing.”

Tax Felon Friday: Introduction of the Congressional Whistleblower Protection Act comes just weeks before this year’s annual National Whistleblower Day celebration on Capitol Hill. The July 30 event will commemorate the nation’s first whistleblower law, which was signed into law during the American Revolution on July 30, 1778.

The latest effort to encourage and protect whistleblowers earns a mention in this week’s Tax Felon Friday feature because such insider information often is critical in catching tax cheats.

The Internal Revenue Service’s Whistleblower Office accepts and investigates specific, timely, and credible claims that identify non-compliance with tax or other laws that fall under IRS purview.

When the whistleblower information is used by the IRS, the provide might be eligible for monetary awards. The award percentage depends on several factors, but generally falls between 15-and-30 percent of the proceeds collected and attributable to the whistleblower's information.

When tax whistleblower information leads to IRS criminal action and collections, I’ll include in the Tax Felon Friday collection.

In the meantime, if you want to catch up on all sorts of tax miscreants, the ol' blogs' special Tax Felon Friday page is a good place to start.

And if you want more tax crime posts, notably those that were published long before I gave them a special end-of-week feature, you can peruse, what else, the tax crimes category. You'll find this post at the top of that collection right now, so just scroll down for more.

You also might find these items of interest:

• Added whistleblower safeguards included in IRS reform bill
• Revolutionary sailors' report of misconduct led to first U.S. whistleblower law
• IRS Whistleblower Office awards more than doubled in FY23, but it still faces substantial backlog

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