II 

118TH CONGRESS 

1ST SESSION S. 625 

To amend the Internal Revenue Code of 1986 to modify and reform rules 

relating to investigations and whistleblowers, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 2, 2023 

Mr. GRASSLEY (for himself, Mr. WYDEN, Mr. WICKER, and Mr. CARDIN) introduced the following bill; which was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to modify 

and reform rules relating to investigations and whistleblowers, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘IRS Whistleblower 

5 Program Improvement Act of 2023’’. 

6 SEC. 2. STANDARD AND SCOPE OF REVIEW OF WHISTLE7 BLOWER AWARD DETERMINATION. 

8 (a) IN GENERAL.—Paragraph (4) of section 7623(b) 

9 of the Internal Revenue Code of 1986 is amended— 


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1 (1) by striking ‘‘appealed to’’ and inserting ‘‘re2 viewed by’’; and 

3 (2) by adding at the end the following: ‘‘Any re4 view by the Tax Court under the preceding sentence 

5 shall be de novo and shall be based on the adminis6 trative record established at the time of the original 

7 determination and any additional newly discovered 

8 or previously unavailable evidence.’’. 

9 (b) CONFORMING AMENDMENT.—The heading of 

10 paragraph (4) of section 7623(b) of the Internal Revenue 

11 Code of 1986 is amended by striking ‘‘APPEAL’’ and in12 serting ‘‘REVIEW’’. 

13 (c) EFFECTIVE DATE.—The amendments made by 

14 this section shall apply to cases under section 7623(b)(4) 

15 of the Internal Revenue Code of 1986 which are pending 

16 on, or filed on or after, the date of the enactment of this 

17 Act. 

18 SEC. 3. EXEMPTION FROM SEQUESTRATION. 

19 (a) IN GENERAL.—Section 255 of the Balanced 

20 Budget and Emergency Deficit Control Act of 1985 (2 

21 U.S.C. 905) is amended— 

22 (1) by redesignating subsection (k) as sub23 section (l); and 

24 (2) by inserting after subsection (j) the fol25 lowing: 


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1 ‘‘(k) AWARDS TO WHISTLEBLOWERS.—An award au2 thorized under section 7623 of the Internal Revenue Code 

3 of 1986 shall be exempt from reduction under any order 

4 issued under this part.’’. 

5 (b) APPLICABILITY.—The amendment made by this 

6 section shall apply to any sequestration order issued under 

7 the Balanced Budget and Emergency Deficit Control Act 

8 of 1985 (2 U.S.C. 900 et seq.) after December 31, 2022. 

9 SEC. 4. WHISTLEBLOWER PRIVACY PROTECTIONS. 

10 (a) IN GENERAL.—Paragraph (6) of section 7623(b) 

11 of the Internal Revenue Code of 1986 is amended by add12 ing at the end the following new subparagraph: 

13 ‘‘(D) WHISTLEBLOWER ANONYMITY BE14 FORE THE TAX COURT.—Notwithstanding sec15 tions 7458 and 7461, the Tax Court shall grant 

16 a whistleblower’s request to proceed anony17 mously before the Court for all proceedings 

18 under this section absent a finding by the Tax 

19 Court that a heightened societal interest exists 

20 for disclosing the whistleblower’s identity, ex21 ceeding the normal interest in knowing a peti22 tioner’s identity. Should the Tax Court find 

23 that such a heightened societal interest exists, 

24 such interest shall be balanced against the poVerDate Sep 11 2014 00:15 Mar 15, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S625.IS S625

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1 tential harm disclosure could cause to the whis2 tleblower.’’. 

3 (b) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to petitions filed with the Tax 

5 Court which are pending on, or filed on or after, the date 

6 of the enactment of this Act. 

7 SEC. 5. MODIFICATION OF IRS WHISTLEBLOWER REPORT. 

8 (a) IN GENERAL.—Section 406(c) of division A of the 

9 Tax Relief and Health Care Act of 2006 is amended by 

10 striking ‘‘such use,’’ in paragraph (1) and inserting ‘‘such 

11 use (which shall include a list and descriptions of the top 

12 tax avoidance schemes, not to exceed 10, disclosed by 

13 whistleblowers during such year),’’. 

14 (b) EFFECTIVE DATE.— The amendment made by 

15 this section shall apply to reports the due date for which 

16 are after the enactment of this Act. 

17 SEC. 6. INTEREST ON WHISTLEBLOWER AWARDS. 

18 (a) IN GENERAL.—Section 7623(b) of the Internal 

19 Revenue Code of 1986 is amended by redesignating para20 graphs (5) and (6) as paragraphs (6) and (7), respectively, 

21 and by inserting after paragraph (4) the following new 

22 paragraph: 

23 ‘‘(5) INTEREST.— 

24 ‘‘(A) IN GENERAL.—If the Secretary has 

25 not provided notice to an individual described in 


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1 paragraph (1) of a preliminary award rec2 ommendation before the applicable date, the 

3 amount of any award under this subsection 

4 shall include interest from such date at the 

5 overpayment rate under section 6621(a). 

6 ‘‘(B) EXCEPTION.—No interest shall ac7 crue under this paragraph after the date on 

8 which the Secretary provides notice to the indi9 vidual of a preliminary award recommendation. 

10 ‘‘(C) APPLICABLE DATE.—For purposes of 

11 this paragraph, the applicable date is the date 

12 that is 12 months after the first date on 

13 which— 

14 ‘‘(i) all of the proceeds resulting from 

15 actions subject to the award recommenda16 tion have been collected, and 

17 ‘‘(ii) either— 

18 ‘‘(I) the statutory period for fil19 ing a claim for refund has expired, or 

20 ‘‘(II) the taxpayers subject to the 

21 actions and the Secretary have agreed 

22 with finality to the tax or other liabil23 ities for the periods at issue, and ei24 ther the taxpayers have waived the 


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1 right to file a claim for refund or any 

2 claim for refund has been resolved.’’. 

3 (b) EFFECTIVE DATE.— 

4 (1) IN GENERAL.—The amendments made by 

5 this section shall take effect 180 days after the date 

6 of the enactment of this Act. 

7 (2) SPECIAL RULE.—In the case of a claim for 

8 a whistleblower award under section 7623(b) of the 

9 Internal Revenue Code of 1986 with respect to 

10 which, as of the date described in paragraph (1)— 

11 (A) the Secretary of the Treasury has not 

12 provided notice to the individual of a prelimi13 nary award recommendation as described in 

14 paragraph (5)(A) of such section, as added by 

15 this Act, and 

16 (B) the applicable date provided in para17 graph (5)(C) of such section, as so added, has 

18 passed, 

19 the applicable date for purposes of such paragraph 

20 (5)(C) is the date that is 12 months after the date 

21 described in paragraph (1). 


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1 SEC. 7. CORRECTION REGARDING DEDUCTIONS FOR AT2 TORNEY’S FEES. 

3 (a) IN GENERAL.—Section 62(a)(21)(A)(i) of the In4 ternal Revenue Code of 1986 is amended by striking 

5 ‘‘7623(b)’’ and inserting ‘‘7623’’. 

6 (b) EFFECTIVE DATE.—The amendment made by 

7 this section shall apply to taxable years ending after the 

8 date of the enactment of this Act. 

Æ 


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