On July 1, President Trump signed the Taxpayer First Act, giving new protections to IRS whistleblowers. Before this act, the IRS could only protect whistleblowers by concealing their identity.
Even without protections against retaliation, the Whistleblower Office of the IRS has still been able to collect over $5 billion in unpaid taxes under the program. This may have something to do with the requirement that the IRS award the whistleblower a percentage of the unpaid taxes collected by the IRS. For 2018, the Whistleblower Office reported that it paid 217 awards to whistleblowers, totaling more than $300 million. The IRS pushed for additional protections for employers in an effort to incentivize more employees to come forward.
The Act creates a private right of action for whistleblowers to sue their employers for retaliation. Employers can no longer discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee for assisting the IRS without risk of liability. Not only does the private right of action apply to the employer, but it applies to individuals as well, such as officers, employees, contractors, subcontractors, or agents of the company. Employees are free to report a company, provide information, or assist a government agency in an investigation for tax underpayments and tax fraud. The employee is also protected from retaliation for reporting anything else the employee reasonably believes is a violation of the IRS tax laws.
Remedies for violations include: reinstatement; 200 percent of back pay and all lost benefits; interest; compensation for costs and special damages; and attorney fees.