New Law Improves Whistleblower Protections for Tax Professionals and Accountants

In 2019, congress passed a new law offering greater protections to tax and accounting whistleblowers. These whistleblower provisions were a part of the Taxpayer First Act (TFA).

The TFA covers a wide variety of disclosures of potential IRS rules violations or tax fraud. Protected disclosures include not only those made directly to the IRS, but also internal disclosures made to supervisors or any other person with the authority to investigate or handle misconduct.

Some examples of protected conduct under the new TFA include:

  • Giving information to a supervisor about underpayment of taxes, or any conduct the employee could reasonably believe to be considered a violation of IRS rules or federal laws relating to tax fraud
  • Reporting tax fraud or IRS violations to the IRS, congress, treasury secretary, comptroller general or TIGTA
  • Participating in internal investigations related to tax fraud or any other violations of internal revenue laws
  • Testifying, participating in or assisting administrative or judicial actions taken by the IRS with regard to underpayments of taxes or any type of violation of internal revenue laws or federal laws relating to tax fraud

Some examples of protected disclosures would include abusive tax schemes, keeping multiple sets of books, claiming false deductions on tax returns, claiming personal expenses as business expenses, purposefully making false entries in financial record, or purposefully underreporting or completely leaving out a form of income.

The TFA also includes information about acts of retaliation. The TFA prohibits many different categories of retaliatory acts, such as suspension, demotion, termination, threats, harassment or any other manner in which an employer might discriminate against a person who blows the whistle on internal wrongdoing.

For more information about the available protections for whistleblowers under the TFA, contact an experienced whistleblower lawyer at Kardell Law Group.