Monday, August 06, 2012

Treasury Official Assures Senator Grassley on Coordination with SEC and DOJ on IRS Whistleblower Regulations

A senior Treasury official has assured Senator Charles Grassley (R-Iowa) that the IRS, the DOJ and the SEC have shared ideas about their respective whistleblower programs and plan to continue to work together to ensure that the whistleblower programs are as successful as possible while at the same time minimizing duplication or conflict to the extent legally possible. In a July 13, 2012 letter to the Senator, Emily McMahon, Acting Assistant Secretary for Tax Policy, said she understands that the IRS has met with DOJ and the SEC to discuss their whistleblower programs. She was responding to a June 21, 2012 letter from Senator Grassley expressing concern over the possibility of duplicative and conflicting whistleblower regulations. Senator Grassley requested a list of meetings or consultations that Treasury and IRS officials have conducted with DOJ and the SEC to ensure that Treasury’s efforts are not duplicative or conflicting with established precedents, such as the definition of planners and initiators.

In a July 20, 2012 letter to Treasury, Senator Grassley asked for clarification on IRS coordination with the SEC and DOJ regarding whistleblower regulations. Specifically, he asked if Treasury staff from the Office of Tax Policy and IRS staff from the Office of Chief Counsel responsible for writing the whistleblower regulations have met with the SEC to discuss the regulations, including those related to planners and initiators.  In a July 25, 2012 response letter, Acting Asst. Secretary McMahon said that, consistent with regular practice, the Office of Chief Counsel has prepared a draft of IRS whistleblower regulations, which is currently being reviewed by IRS and Treasury officials. While IRS staff  has had meetings and conversations with DOJ and SEC to discuss their whistleblower programs, noted the Treasury official, staff from the Office of Tax Policy had not yet (as of July 25) met with SEC and DOJ about the draft whistleblower regulations. However, she assured Senator Grassley that Treasury staff expects to meet with SEC staff this week to discuss the guidance and with DOJ in the near future.

Senator Grassley was involved in developing the SEC whistleblower provisions that are part of the Dodd-Frank Act. He has also authored numerous whistleblower protection statutes, including the 1986 and 2009 amendments to the False Claims Act, the 2006 amendments to the Internal Revenue Service whistleblower program, and the Sarbanes-Oxley Act whistleblower protections.

In a May 10, 2011 letter to SEC Chair Mary Schapiro, Senator Grassley noted that the SEC Dodd-Frank mandated whistleblower program is modeled after the IRS whistleblower program enacted into law in 2006. In that letter, Senator Grassley urged the SEC to consult with the IRS on how to best ensure the independence of the SEC’s whistleblower program.