January 23, 2021

Volume XI, Number 23

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January 21, 2021

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DOL Implements Procedures for New Tax Whistleblower Claim Under Taxpayer First Act

On September 11, 2019, the Department of Labor announced that whistleblower retaliation complaints under the Taxpayer First Act (TFA) will be handled by the Occupational Safety and Health Administration (OSHA). 

TFA was created as part of a broader IRS reform bill that passed on July 1, 2018.   It provides a retaliation claim for employees who are terminated or otherwise disciplined because they provided information or assisted in an investigation regarding underpayments of tax or violations of the internal revenue or other federal tax fraud laws.  Generally speaking, the procedures for a TFA whistleblower retaliation claim follow those in place for whistleblower claims under the Sarbanes-Oxley Act, which are also administered by OSHA. 

Employees who prevail under this cause of action are entitled to “all relief necessary to make the employee whole” and compensatory damages, including reinstatement, 200% of the amount of back pay and 100% of all lost benefits, with interest, and special damages including litigation costs, expert witness fees, and reasonable attorney fees.  Employers cannot require employees to arbitrate TFA retaliation claims through pre-dispute arbitration agreements.

The TFA adds to the increasing list of statutes, such as the False Claims Act and the Sarbanes-Oxley Act, which provide whistleblower protections to employees who reasonably believe that their employer has violated federal law and report such beliefs.  When an employee blows the whistle regarding alleged wrongdoing, now including tax underpayment or fraud, employers should consult outside counsel to help navigate through the investigation and subsequent interactions with the employee and avoid or better prepare for potential whistleblower litigation. 

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© Polsinelli PC, Polsinelli LLP in CaliforniaNational Law Review, Volume IX, Number 267
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Conne Bertram Government Contract Lawyer Polsinelli Law Firm
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Connie focuses her practice on whistleblower, trade secrets, government contractors and employee mobility counseling and litigation. She frequently conducts confidential internal investigations involving executive-level employees, including alleged fraud, theft or misuse of company data, trade secrets, sexual harassment and code of conduct violations. She routinely counsels, investigates and litigates restrictive covenant and trade secrets disputes between employers and former employees.

Connie has defended complex whistleblower, trade secrets and restrictive...

202.777.8921
Jack Blum Polsinelli Employment Attorney
Associate

Jack Blum is an associate in the firm’s Employment Disputes, Litigation, and Arbitration practice, where he represents employers in connection with a wide range of employment law issues. Jack has extensive experience in defending employers against claims by their employees in federal and state courts, as well as before government agencies like the EEOC, Department of Labor, and state human rights commissions. Jack aggressively defends his client’s personnel practices and decisions while not losing sight of their underlying business goals and objectives. Jack represents clients in all...

202.772.8483
Associate

Samuel Long is an associate in the Employment Disputes, Litigation and Arbitration practice group. Sam represents corporate clients and individuals in a variety of industry sectors in all aspects of labor and employment law, including representation before administrative agencies and litigation in state and federal court. Clients rely on him for valuable legal counsel as they face sensitive workplace issues. He has successfully defended clients against claims of discrimination, retaliation, and wrongful termination under state and federal statutes, including Title VII,...

202-626-8365
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