Posts Tagged ‘Senator Chuck Grassley’

The Senate proposes bill to improve the IRS Whistleblower Program

IRS Whistleblower Claims

IRS Whistleblower ClaimsThe fight against fraud received some significant help last week when Senators Chuck Grassley and Ron Wyden introduced legislation geared to strengthen the IRS Whistleblower program.   Read More…

 

Proposed Improvements to IRS Whistleblower Program

Sen. Chuck Grassley and Sen. Ron Wyden today introduced bipartisan legislation to improve IRS communication with tax fraud whistleblowers and protect those whistleblowers from workplace retaliation, they announced in a news release.

“Whistleblowers have helped the IRS recover more than $3 billion for the taxpayers that otherwise would have been lost to fraud,” Grassley said.  “Whistleblowers have the potential to help even more.  They need assurances that putting their jobs at risk carries protections.  They also need better communication about where their cases stand so they’re not sitting in limbo.  This bill will offer a welcome mat to those who are too often treated like skunks at a picnic.”

“Whistleblowers are a crucial line of defense against waste, fraud and abuse,” said Wyden. “This legislation will strengthen protections for employees of companies who come forward to report tax evasion.  Empowering these whistleblowers is key to rooting out bad actors who are breaking the law by dodging their taxes.”

The IRS Whistleblower Improvements Act of 2017 is based on the Grassley-Wyden amendment included in the Taxpayer Protection Act of 2016.  The Taxpayer Protection Act, along with the Grassley-Wyden amendment, passed the Finance Committee in April 2016 but was never considered by the full Senate.

The measure would: (1) increase communication between the IRS and whistleblowers, while protecting taxpayer privacy, and (2) provide legal protections to whistleblowers from employers retaliating against them for disclosing tax abuses.

To increase communication, the bill specifically would allow the IRS to exchange information with whistleblowers where doing so would be helpful to an investigation.  It would further require the IRS to provide status updates to whistleblowers at significant points in the review process and allow for further updates at the discretion of the IRS.  It does this while ensuring that the confidentiality of this information is maintained.  Whistleblowers have expressed concern and frustration in their inability to receive information from the IRS on the status of their cases, which may take years to resolve.  Since these individuals often put their livelihoods on the line to come forward, poor communication adds to their anxiety and is a disincentive to others with knowledge of high dollar tax fraud.

To protect whistleblowers from employer retaliation, the bill extends anti-retaliation provisions to IRS whistleblowers that are currently afforded to whistleblowers under other whistleblower laws, such as the False Claims Act and Sarbanes-Oxley.  Tax whistleblowers may be easily identified within their firms as having specific knowledge of tax fraud.  Extending the protections to tax whistleblowers that apply to whistleblowers in other fields is a matter of fairness and in the interest of U.S. taxpayers who benefit from such whistleblowing, Grassley and Wyden said.

The IRS Whistleblower Improvements Act of 2017 will be assigned to the Finance Committee, where Grassley is a senior member and former chairman, and Wyden is ranking member.

Grassley successfully enacted much-needed updates to the IRS whistleblower program in 2006.  The improvements have led to the recovery of more than $3 billion in taxes that otherwise would have been lost to fraud.  The IRS has made some progress in improving its treatment of whistleblowers, due to congressional oversight, but challenges remain.  The potential is strong to recover much more in fraud proceeds if the IRS continues to improve its procedures, and Congress delivers the improvements in the Grassley-Wyden legislation.

Two well-known pro-whistleblower groups endorsed the legislation.

“Honest taxpayers are the true victim of every tax fraud.  This reform provides critical protection for those courageous enough to risk losing their jobs to report illegal tax schemes.  The legislation closes a loophole in whistleblower law that currently fails to provide any protection for those who report tax fraud. This bill is urgently needed,” said Stephen M. Kohn, Executive Director, National Whistleblower Center.

“These amendments will significantly strengthen the fraud-fighting potential of the IRS Whistleblower statute and promote the public-private partnerships that the law was originally enacted to foster,” said Robert Patten, President and CEO of Taxpayers Against Fraud.  “In particular, the anti-retaliation provisions will encourage more citizens to come forward and will result in the recovery of significant funds that would otherwise be lost to tax fraud.”

Grassley and Wyden are among the founding members of the bipartisan Senate Whistleblower Protection Caucus.  Grassley is chairman and Wyden is vice-chairman.

 

Attorney General Nominee Pledges Support to Fight Fraud using False Claims Act

Alabama Senator Jeff Sessions is being questioned this week at confirmation hearings on his nomination for U.S. Attorney General by President-elect Donald Trump.  On Tuesday, Senator Sessions pledged his support to fighting fraud against the government and his support of the False Claims Act as a means to do so. Read More…

 

Happy 237th Birthday to Whistleblower Law!

Senator Chuck Grassley

Senator Chuck Grassley

Senator Chuck Grassley

To help celebrate the 237th anniversary of the first whistleblower law passed by the Continental Congress back in 1778, United States Senator Chuck Grassley of Iowa prepared a stirring statement recounting the law’s history and the obstacles it has had to overcome to become the effective tool for recovering taxpayer money that it is today.

Grassley first acknowledged that “Whistleblowers have always been crucial in helping Congress and the federal Government route out fraud and misconduct,” and as proof cited that since 1986 the federal Government has recovered $42 billion from whistleblower cases – $6 billion in the Fiscal Year 2014 alone.

Unfortunately, the path to recovery has not always been a smooth one. As Grassley recounted, the False Claims Act was essentially gutted in 1943 when Congress bowed to outside pressure to protect those who commit fraud. In 1981, the GAO reported that the “sad truth is that crime against the Government often does pay.”

Fortunately for taxpayers, Grassley co-authored much needed amendments to the False Claims Act in 1986 and acted again in 2009 to combat various courts’ efforts to create loopholes in the law that allowed subcontractors to get away with fraud because ether the Government was not directly presented with the false claims or the relator hadn’t proven a judicially-constructed “intent” requirement relating to whether the Government itself paid the false claims.

Grassley emphasized the importance of Congress staying vigilant over the application of the False Claims Act since government agencies and even courts can be swayed by the lobby groups and powerful corporate defendants who would stand to benefit from the weakening of laws designed to recover taxpayers’ money.

As an example of an agency working against Congress’s intent, Grassley cited the Department of Justice’s recent attempt to minimize a relator award in a Medicare and Medicaid fraud suit brought by a James Hoyer client that resulted in a $197 million settlement with Endo Pharmaceuticals. Fortunately the Court in our case recognized that our client had contributed significantly to the Government’s investigation and was a key component to achieving the massive recovery. The Judge observed that Congress intended that “the only measuring stick” for an award be “the contribution of the relator.”

Grassley concurred with the Court, explaining:

That Judge was right. Congress intended to empower, protect, and reward relators who identify fraud against the taxpayers. History teaches us that weakening the relator’s rights weakens the government’s ability to fight fraud. All that does is let wrongdoers off the hook and cost the taxpayers money.

In sum, Grassley urged his “colleagues to stand strong for the most effective tool we have to combat fraud.”

Happy Birthday Whistleblower Law!

You can read the entire statement here.

 

Senator Grassley Praises the False Claims Act

Senator Chuck Grassley

Iowa Senator Chuck Grassley praised the False Claims Act today on the 237 year anniversary of the passage of the country’s first whistleblower law.

On July 30, 1778, the Continental Congress passed the very first whistleblower law in the United States.  It read:

[I]t is the duty of all persons in the service of the United States . . . to give the earliest information to Congress or other proper authority of any misconduct, frauds or misdemeanors committed by any officers or persons in the service of these states, which may come to their knowledge.

Whistleblowers have always been crucial in helping Congress and the federal Government route out fraud and misconduct.  It is simple common sense to reward and protect whistleblowers who report waste, fraud, and abuse.  The False Claims Act does that.

Senator Grassley also mentioned the recent decision by a Pennsylvania federal court judge to give a 24-percent award to Peggy Ryan, James Hoyer client and whistleblower in the Endo Pharmaceuticals case.  The Department of Justice had requested a lower award, despite Ryan’s extraordinary efforts in the case.  The judge and Senator Grassley were critical of DOJ’s stance:

Just recently the Justice Department tried to minimize a relator award in a Medicare and Medicaid fraud suit.  The relator contributed significantly to the case.  The Judge recognized that Congress intended that “the only measuring stick” for an award is “the contribution of the relator.”

That Judge was right.  Congress intended to empower, protect, and reward relators who identify fraud against the taxpayers.  History teaches us that weakening the relator’s rights weakens the government’s ability to fight fraud.  All that does is let wrongdoers off the hook and cost the taxpayers money.  That is not the result we intended with the False Claims Act.  It is also not the result the Continental Congress, so concerned about identifying “misconduct, frauds and misdemeanors,” would have wanted.

Senator Grassley spoke passionately about the value of whistleblowers and how their efforts help the American government and taxpayers:

In Fiscal Year 2014 alone, the federal Government recovered nearly $6 billion under the Act.  That makes more than $22 billion since January 2009, and more than $42 billion since 1986.  These recoveries represent victories across a wide array of industries and government programs.  Those programs include mortgage insurance, federal student aid, and Medicare and Medicaid, as well as Defense contracts.

The Department of Justice credits whistleblowers for their important role in this success.
According to the Justice Department, whistleblowers accounted for $3 billion in recoveries under the Act in Fiscal Year 2014.  In fact, over 80% of False Claims Act cases are initiated by whistleblowers.  Clearly the False Claims Act is working very well.

Of course, the Act has no shortage of critics—typically the groups where you find perpetrators of fraud.  But we have learned our lesson that a weak False Claims Act is not in the taxpayer’s best interest.

In 1943, Congress bowed to pressure to undo the Act’s crucial qui tam provisions.
Amendments passed back then barred actions where the Government already had knowledge of the fraud.  The result was to block nearly all private actions.  Congress assumed that the Justice Department could do a good job prosecuting fraud all by itself.  They were wrong.
Between 1943 and 1986, fraud against the Government skyrocketed.  Most of those accused went unpunished.

Click here to read the complete statement by Senator Grassley.