Yesterday I filed comments with the Treasury Department [PDF] on behalf of our clients about the Proposed Regulations regarding what “collected proceeds” [PDF] should mean when determining whistleblower awards under section 7623(b). There will be a hearing on these Regs on May 11 in Washington at which we will be permitted to make some statements about our comments. In a nutshell, we said that the Regs were currently too narrowly drafted with respect to credits and refunds, that they should also cover criminal fines, and that when awards are eligible for payment should also be addressed.
For those of you who haven’t yet had the pleasure of going through a Treasury Regulation drafting exercise like this one, the next step after the hearing is for the IRS and Treasury to review the comments and decide if and how they want to make changes to the Reg to address the issues raised. The Reg drafting team may ignore the comments, they may rewrite the Reg from scratch, or they make some changes to the language using the commentator’s or Chief Counsel’s proposed verbiage. Usually the language they come up with is somewhere in the middle of those, meaning they use their own language to incorporate ideas or avoid pitfalls that have been raised by commentators. Then they will re-release the Reg in either Temporary or Final form in a Treasury Decision, at which point the Reg is effective. Hopefully that won’t take too long – as Reg projects often do – because many award determinations literally hang in the balance of how the Reg comes out.
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