Difference between revisions of "Whistleblower Protection Laws"

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See this helpful article in Accounting Today: [https://www.accountingtoday.com/opinion/whistleblower-protections-for-accountants-and-tax-professionals-bolstered-by-new-law Whistleblower protections for accountants and tax professionals bolstered by new law].
See this helpful article in Accounting Today: [https://www.accountingtoday.com/opinion/whistleblower-protections-for-accountants-and-tax-professionals-bolstered-by-new-law Whistleblower protections for accountants and tax professionals bolstered by new law].


=='''Protected Against Retaliation Under the Taxpayer First Act'''==
Section 1405(b) of the TFA prohibits any “employer, officer, employee, contractor, subcontractor, or agent” of an employer from retaliating against a whistleblower.
Section 1405(b) of the TFA prohibits any “employer, officer, employee, contractor, subcontractor, or agent” of an employer from retaliating against a whistleblower.


=='''What whistleblowing is protected under the Taxpayer First Act?'''==
=='''Protected Whistleblowing Under the Taxpayer First Act'''==
The TFA protects a broad range of disclosures about potential violations of IRS rules or tax fraud. It protects not only disclosures to the IRS, but also internal disclosures, including an employee’s disclosure to a supervisor or “any other person working for the employer who has the authority to investigate, discover, or terminate misconduct.”  In particular, protected conduct includes:
The TFA protects a broad range of disclosures about potential violations of IRS rules or tax fraud. It protects not only disclosures to the IRS, but also internal disclosures, including an employee’s disclosure to a supervisor or “any other person working for the employer who has the authority to investigate, discover, or terminate misconduct.”  In particular, protected conduct includes:


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(B) to testify, participate in, or otherwise assist in any administrative or judicial action taken by the Internal Revenue Service relating to an alleged underpayment of tax or any violation of the internal revenue laws or any provision of Federal law relating to tax fraud.
(B) to testify, participate in, or otherwise assist in any administrative or judicial action taken by the Internal Revenue Service relating to an alleged underpayment of tax or any violation of the internal revenue laws or any provision of Federal law relating to tax fraud.


=='''Does the tax fraud whistleblower law protect only disclosures of actual tax fraud?'''==
TFA whistleblower protection is '''not limited to disclosures of actual tax fraud.''' Instead, DOL and federal court precedent construing [https://www.zuckermanlaw.com/legal-services/sarbanes-oxley-whistleblower/ similar whistleblower protection laws] protect a whistleblower’s reasonable but mistaken belief that the conduct complained of constituted a violation of relevant law.  The whistleblower, however, must demonstrate that they had an objectively reasonable belief, which is assessed based on the knowledge available to a reasonable person in the circumstances with the employee’s training and experience.
TFA whistleblower protection is not limited to disclosures of actual tax fraud. Instead, DOL and federal court precedent construing similar whistleblower protection laws protect a whistleblower’s reasonable but mistaken belief that the conduct complained of constituted a violation of relevant law.  The whistleblower, however, must demonstrate that they had an objectively reasonable belief, which is assessed based on the knowledge available to a reasonable person in the circumstances with the employee’s training and experience.


=='''What type of retaliation is prohibited against tax fraud whistleblowers?'''==
=='''Prohibited Retaliation Against Tax Fraud Whistleblowers'''==
The TFA prohibits a wide range of retaliatory personnel actions, including discharging, demoting, suspending, threatening, harassing, or in any other manner discriminating against a whistleblower in the terms and conditions of employment.
The TFA prohibits a wide range of [https://www.zuckermanlaw.com/sp_faq/whistleblower-retaliation/ retaliatory personnel actions], including discharging, demoting, suspending, threatening, harassing, or in any other manner discriminating against a whistleblower in the terms and conditions of employment.


The catch-all category of retaliation (“in any other manner” discriminating against a whistleblower) includes non-tangible employment actions, such as “outing” a whistleblower in a manner that forces the whistleblower to suffer alienation and isolation from work colleagues.  See Menendez v. Halliburton, Inc., ARB Nos. 09-002, -003, ALJ No. 2007- SOX- 5 (ARB Sept 13, 2011).  An employment action can constitute actionable retaliation if it “would deter a reasonable employee from engaging in protected activity.”  Id.at 20.
The catch-all category of [https://www.zuckermanlaw.com/sp_faq/whistleblower-retaliation/ retaliation] (“in any other manner” discriminating against a whistleblower) includes non-tangible employment actions, such as “outing” a whistleblower in a manner that forces the whistleblower to suffer alienation and isolation from work colleagues.  See ''Menendez v. Halliburton, Inc.'', ARB Nos. 09-002, -003, ALJ No. 2007- SOX- 5 (ARB Sept 13, 2011).  An employment action can constitute actionable retaliation if it “would deter a reasonable employee from engaging in protected activity.”  ''Id.'' at 20.


=='''What is the burden of proof for a tax fraud whistleblower in a TFA whistleblower retaliation case?'''==
=='''Burden of Proof in a TFA Whistleblower Retaliation Case'''==
Section 1405(b) of the TFA applies the causation standard and burden-shifting framework set forth in the AIR21 Whistleblower Protection Law. Under that framework, the whistleblower prevails by proving that their protected whistleblowing was a contributing factor in the unfavorable personnel action taken by their employer.
Section 1405(b) of the TFA applies the [https://www.zuckermanlaw.com/clear-convincing-evidence-whistleblower-case/ causation standard] and burden-shifting framework set forth in the [https://www.law.cornell.edu/uscode/text/49/42121 AIR21 Whistleblower Protection Law]. Under that framework, the whistleblower prevails by proving that their protected whistleblowing was a contributing factor in the unfavorable personnel action taken by their employer.


The DOL ARB has emphasized that the standard is low and “broad and forgiving”; protected activity need only play some role, and even an “[in]significant” or “[in]substantial” role suffices. Palmer v. Canadian Nat’l R.R., ARB No. 16-035, ALJ No. 2014-FRS-154, at 53 (ARB Sept. 30, 2016)(emphasis in original).  Examples of circumstantial evidence that can establish “contributing factor” causation include:
The DOL ARB has emphasized that the standard is low and “broad and forgiving”; protected activity need only play some role, and even an “[in]significant” or “[in]substantial” role suffices. ''Palmer v. Canadian Nat’l R.R.'', ARB No. 16-035, ALJ No. 2014-FRS-154, at 53 (ARB Sept. 30, 2016)(emphasis in original).  Examples of circumstantial evidence that can establish “contributing factor” causation include:
*temporal proximity;
*the falsity of an employer’s explanation for the adverse action taken;
*inconsistent application of an employer’s policies;
*an employer’s shifting explanations for its actions;
*animus or antagonism toward the whistleblower’s protected activity; and
*a change in the employer’s attitude toward the whistleblower after they engage in protected activity.


temporal proximity;
Once the whistleblower proves that their protected conduct was a [https://www.zuckermanlaw.com/clear-convincing-evidence-whistleblower-case/ contributing factor in the adverse action], the employer can avoid liability only if it proves by clear and convincing evidence that it would have taken the same adverse action in the absence of the whistleblower engaging in protected conduct.
the falsity of an employer’s explanation for the adverse action taken;
inconsistent application of an employer’s policies;
an employer’s shifting explanations for its actions;
animus or antagonism toward the whistleblower’s protected activity; and
a change in the employer’s attitude toward the whistleblower after they engage in protected activity.
Once the whistleblower proves that their protected conduct was a contributing factor in the adverse action, the employer can avoid liability only if it proves by clear and convincing evidence that it would have taken the same adverse action in the absence of the whistleblower engaging in protected conduct.


=='''What remedies or damages can a whistleblower recover in a tax fraud whistleblower retaliation case?'''==
=='''Remedies in a Tax Fraud Whistleblower Retaliation Case'''==


A prevailing TFA whistleblower is entitled to make-whole relief, which includes:
A prevailing TFA whistleblower is entitled to make-whole relief, which includes:
*reinstatement;
*double back pay with interest;
*uncapped “special damages,” which courts have construed as encompassing damages for emotional distress and reputational harm; and
*attorney fees, litigation costs, and expert witness fees.


reinstatement;
These remedies are substantially similar to the relief authorized in the [https://www.zuckermanlaw.com/false-claims-act-whistleblower-retaliation-lawyer/ anti-retaliation provision of the False Claims Act].  Neither statute authorizes an award of punitive damages, but double back pay and uncapped special damages can be a potent remedy.
double back pay with interest;
uncapped “special damages,” which courts have construed as encompassing damages for emotional distress and reputational harm; and
attorney fees, litigation costs, and expert witness fees.
These remedies are substantially similar to the relief authorized in the anti-retaliation provision of the False Claims Act.  Neither statute authorizes an award of punitive damages, but double back pay and uncapped special damages can be a potent remedy.


=='''What is the deadline or statute of limitations to file a tax fraud TFA whistleblower retaliation case?'''==
=='''Deadline or Statute of Limitations to File a TFA Whistleblower Retaliation Case'''==
The statute of limitations for a TFA whistleblower retaliation claim is 180 days from the date that the employee is first informed of the adverse action.
The statute of limitations for a TFA whistleblower retaliation claim is 180 days from the date that the employee is first informed of the adverse action.


=='''Where are tax fraud whistleblower retaliation cases adjudicated?'''==
=='''Tax Fraud Whistleblower Retaliation Case Adjudication'''==
The claim must be filed initially with OSHA, which will investigate the claim.  If OSHA determines that there is reasonable cause to believe that a violation occurred, OSHA can order relief, including reinstatement of the whistleblower.
The claim must be filed initially with OSHA, which will investigate the claim.  If OSHA determines that there is [https://www.zuckermanlaw.com/sp_faq/reasonable-cause-standard-osha-whistleblower-investigation/ reasonable cause] to believe that a violation occurred, OSHA can order relief, including reinstatement of the whistleblower.


Either party can appeal OSHA’s determination by requesting a de novo hearing before the DOL Office of Administrative Law Judge (OALJ), but an employer’s objection to an order of preliminary relief will not stay the order of reinstatement.  Once a TFA retaliation claim has been pending before the DOL for more than 180 days, the whistleblower can remove the claim to federal court and try the case before a jury.  
Either party can appeal OSHA’s determination by requesting a de novo hearing before the DOL Office of Administrative Law Judge (OALJ), but an employer’s objection to an order of preliminary relief will not stay the order of reinstatement.  Once a TFA retaliation claim has been pending before the DOL for more than 180 days, the whistleblower can remove the claim to federal court and try the case before a jury.  


If my employer requires arbitration of employment disputes, can I file a TFA whistleblower claim with the Department of Labor?
=='''Employer Mandatory Arbitration of Employment Disputes'''==
Yes.  TFA retaliation claims are exempt from mandatory arbitration.
TFA retaliation claims are exempt from mandatory arbitration.


=='''Can a whistleblower qualify for an award for reporting tax fraud to the IRS?'''==
=='''Awards for Reporting Tax Fraud to the IRS'''==
Under 26 USC § 7623(b), the IRS is required to issue an award to tax whistleblowers of 15% to 30% of proceeds collected from tax fraud or tax underpayments if:
Under 26 USC § 7623(b), the IRS is '''required to issue an award to tax whistleblowers of 15% to 30% of proceeds collected''' from tax fraud or tax underpayments if:
*the whistleblower provides a tip that the IRS decides to take action on (a whistleblower cannot force the IRS to act on a tip);
*the amount in dispute (the tax underpayment, including interest and penalties) exceeds $2 million (if the taxpayer is an individual, his or her gross income must exceed $200,000 for at least one of the tax years in question); and
*the IRS collects tax underpayments resulting from the action (including any related actions).


the whistleblower provides a tip that the IRS decides to take action on (a whistleblower cannot force the IRS to act on a tip);
the amount in dispute (the tax underpayment, including interest and penalties) exceeds $2 million (if the taxpayer is an individual, his or her gross income must exceed $200,000 for at least one of the tax years in question); and
the IRS collects tax underpayments resulting from the action (including any related actions).
During fiscal year 2018, the IRS awarded $312M to tax fraud whistleblowers, and whistleblowers enabled the IRS to recover $1,441,255,859.
During fiscal year 2018, the IRS awarded $312M to tax fraud whistleblowers, and whistleblowers enabled the IRS to recover $1,441,255,859.