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Earlier this month, lawmakers introduced two new pieces of legislation in the Senate with the aim of increasing corporate financial transparency and reinforcing the IRS whistleblower program. Led by Senator Chris Van Hollen and supported by ten Senate Democrats and independents, the Disclosure of Tax Havens and Offshoring Act seeks to shed light on corporations' use of tax havens and offshoring incentives. Under this bill, the Securities and Exchange Commission would require large corporations to publicly disclose country-by-country financial reports, covering profits, taxes, employees, and tangible assets.


The legislation aims to improve transparency for the American public and investors regarding corporations' exploitation of the tax system and the risks associated with offshore tax havens. Currently, corporations with annual revenues exceeding $850 million report this information to the IRS, but these reports are not public. The European Union and Australia are already moving towards increased public reporting, while the Financial Accounting Standards Board in the US is working on updating its rules for more detailed international tax disclosures.


In addition to the Disclosure of Tax Havens and Offshoring Act, a bipartisan group of senators introduced the IRS Whistleblower Program Improvement Act. This bill contains six measures designed to bolster the program, ensure fairness, and protect whistleblowers. The legislation proposes "de novo" review for U.S. Tax Court appeals, anonymity for whistleblowers, exemption of awards from budget sequestration, payment of interest to awardees in specific cases, alignment of attorney's fees tax treatment with other whistleblower programs, and enhancement of the program's annual report to Congress.


The IRS Whistleblower Awards Program has a successful history of preventing tax evasion and fraud, collecting over $6 billion from wealthy individuals and businesses and retrieving additional billions through the Offshore Voluntary Disclosure Program. The proposed improvements aim to encourage greater cooperation and fairness within the tax system by offering better protection and support for whistleblowers.


Talley's team of tax professionals provide comprehensive tax compliance and consulting services so you can preserve, enhance, and pass on your assets and wealth to the next generation. We welcome the opportunity to discuss the current options available for you. For more information, contact us today.


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