The Internal Revenue Service (IRS) is publishing today a new proposed regulation for its whistleblower reward program. In today's Federal Register, the new regulation makes clear that whistleblowers can receive a reward for providing information that prevents the IRS from issuing a refund that is not actually owed under law. The new regulation resolves an issue raised last year by Iowa Senator Charles Grassley. In a statement to IowaPolitics.Com, Sen. Grassley said:
These regulations are good news for whistleblowers. The Commissioner made the common-sense decision of ensuring that individuals who blow the whistle on improper refund claims will be rewarded, as I intended when I wrote the law. These new regulations will help the IRS target tax fraud. This is an issue of fairness for honest taxpayers. I hope these new regulations mean the IRS has turned the corner on encouraging whistleblowers and that this program will be a success. Next, the IRS needs to finalize these regulations quickly so they will apply to all the whistleblowers who filed claims after the 2006 law and have been waiting for their awards.
The IRS explained the proposed regulation as follows:
This regulation clarifies the definitions of proceeds of amounts
collected and collected proceeds for purposes of section 7623 and that
the provisions of Treas. Reg. Sec. 301.7623-1(a) concerning refund
prevention claims are applicable to claims under section 7623(a) and
(b). In clarifying the definitions of proceeds of amounts collected and
collected proceeds, this regulation provides that the reduction of an
overpayment credit balance is also considered proceeds of amounts
collected and collected proceeds under section 7623.
The regulation is proposed to be an amendment to 26 CFR Section 301.7623-1.Continue Reading...