Major Tax Fraud
What was used sparingly if not dismissed altogether in the past has now become the forerunner in detecting tax fraud — the IRS Whistleblower Program. Due primarily to amendments to the law that went into effect at the end of 2006, in early 2009 the IRS saw the largest collection ever by an informant under the amended IRS Whistleblower Program: the record $780 million UBS settlement. Since then, the settlement has recieved much attention and demonstrates that whistleblower cooperation will play a large role in the future of IRS enforcement efforts. This is what the IRS says about its policies and procedures regarding major tax fraud collections under newly-amended Internal Revenue Code 7623(b):
“The IRS Whistleblower Office pays money to people who blow the whistle on persons who fail to pay the tax that they owe. If the IRS uses information provided by the whistleblower, it can award the whistleblower up to 30 percent of the additional tax, penalty and other amounts it collects.”
But the IRS wants real whistleblowers with detailed information — not just anyone with an ax to grind. Whistleblowers with credible reports of fraud would be advised to seek the representation of an attorney well-versed in whistleblower litigation and IRS practice and procedure.
“The IRS is looking for solid information, not an ‘educated guess’ or unsupported speculation. We are also looking for a significant Federal tax issue – this is not a program for resolving personal problems or disputes about a business relationship.”
If the taxes, penalties, interest and other amounts in dispute exceed $2 million, and a few other qualifications are met, the IRS will pay 15 percent to 30 percent of the amount collected. If the case deals with an individual, his or her annual gross income must be more than $200,000.
Frohsin & Barger’s Tax Fraud Group, led by former IRS Special Agent and federal prosecutor, Ron Brunson, is among only a few law firms in the country highly-focused upon assisting whistleblowers in participating in the IRS Whistleblower Program. The IRS tends to be inherently suspicious of whistleblowers, but if you bring forward valuable information and are represented by lawyers who understand the IRS mindset and procedures and who have credibility with the agency, then you stand a good chance of receiving a substantial reward. To learn more about Major Tax Fraud and to read the latest news and commentary regarding the IRS Whistleblower Program, visit our companion website: TaxFraudBlawg.