IRS Tax Whistleblower Program

To combat tax fraud and evasion, the U.S. government created the IRS whistleblower program that provides those who expose unlawful activities with protection and rewards. The Internal Revenue Service (IRS) estimates that every year $450 billion dollars is underpaid in taxes by companies and individuals, which unfairly shifts the burden of federal funding onto ordinary citizens. In 2006 Congress passed the Tax Relief and Healthcare Act that was modeled after the successful False Claims Act. To date, the IRS Whistleblower Office has paid over $315 million in awards to the brave relators who helped the authorities recover illegally hidden funds.

Protection and Anonymity

People who want to blow the whistle can submit their information anonymously by hiring an attorney to represent them. Together, they will work with their attorney to organize a claim by completing IRS Form 211, attaching any relevant documents in their possess, and then anonymously sending the form to the respective IRS office. Over the course of the investigation, the whistleblower’s identity will remain protected since the authorities will never reveal any identifying information such as his name, age, gender, or job position.

False Claims Act Reward Provision

If the authorities fine or file a lawsuit against a company based on the information provided by a qui tam relator, that individual is entitled to a payment of 15-30% of the amount recovered by the government. The information provided by whistleblowers must be “privileged”, meaning that it is not commonly accessible or available in public records. Another factor that increases the amount of reward provided is how long it took the plaintiff to approach the government about the alleged illegal scheme. Also, more detailed submissions to the IRS that contain thorough legal and technical analysis of taxpayer records may help to secure a larger award.

Tax Fraud Examples

Underreporting or omitting income from tax statements

Lying about the amount of eligible tax deductions

Falsifying accounting books and records

Hiding or transferring assets or income

The invaluable help provided by whistleblowers

To date, IRS Whistleblower Office has awarded over $403 million to whistleblowers, $103 million of which have been paid in 2015 alone. Every year the government recovers hundreds of billions in uncollected corporate taxes thanks to the help of anonymous tips. Usually, most of the information about the companies involved cannot be disclosed to protect the relator’s identity. In September 2012, however, Bradley Birkenfeld has been awarded $104 million for his role in exposing how UBS helped its clients conceal money in Swiss tax shelters.

How to report fraud under the IRS Whistleblower Program

Any individual who discovers tax fraud may file a case with the IRS. Whistleblowers do not have to be citizens and do not have to be employees of the company they are reporting. Cases must be submitted as early as possible due to the statute of limitations, which can be as short as three years. If you or someone you know possess valuable information on a company or individual cheating on their taxes, you should contact a whistleblower attorney immediately.

Submissions must be accompanied by evidence including financial data, a description of the company’s assets, copies of books and records, transaction documents, the location of bank accounts, or even the personal addresses and employment history of the persons involved in the alleged scheme.

Take the First Step

If you are unsure whether you have a whistleblower case, you should still contact an attorney as soon as possible because Statute of Limitations laws may prevent you from filing a case if too much time has passed. Your first consultation is free and totally confidential. Call us now at 1-800-681-3228, or file a form by clicking the button below.

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