Anonymous IRS Whistleblower to Receive $11.6 Million in Tax Fraud Case

tax fraud

An anonymous IRS whistleblower will receive $11.6 million for his willingness to report rampant tax fraud.
Image source: Wikimedia Commons

In yesterday’s post, we went over the basics of filing a whistleblower claim with the Internal Revenue Service. While the IRS’ whistleblower program has not historically seen the same volume of cases as the False Claims Act, recent years have seen an increase in claims filed to the IRS.

In today’s post, we examine the recent $11.6 million award to an anonymous whistleblower. This corporate tax fraud case has left interested parties in disagreement on whether it’s a sign that the IRS is stepping up its game or if it will continue to lag in processing the increasing number of whistleblower claims.

Tens of millions recovered by U.S. Treasury

The details of the allegations in this recent settlement are somewhat scarce. The relator opted to remain anonymous, and the corporation is not named. As of August 2015, an anonymous relator was given a $11.6 million award for his work in a whistleblower case that resulted in tens of millions of dollars recovered by the IRS.

The whistleblower’s legal counsel relayed that tens of thousands of tax fraud claims await recognition and/or prosecution – and only a handful of these cases are reaching settlement.

Taxpayers Against Fraud said in a statement,

“It’s hard to celebrate this one win knowing how many other great cases are spinning in the backlog….The good news is that over 55,000 claims, each putatively worth more than $2 million in delinquent taxes, have been filed with the IRS whistleblower office in the last 8 years. The bad news is that the IRS has settled fewer than 15 cases in that same period of time – and that includes the case settled this week. The problem is not that whistleblowers are not coming forward with terrific information; it’s that the IRS is dropping the ball….The agency is bureaucratic, myopic, and not leveraging whistleblower information and private legal resources to achieve mission success. At a time when Congress is hammering the Service around the head, you would think the agency would be focused on changing the storyboard, but so far that has not happened.”[1. “IRS Whistleblower Receives $11.6 Million Award.” September 1, 2015. http://www.taf.org/blog/irs-whistleblower-receives-116-million-award]

Counsel for the successful whistleblowers expressed a similar sentiment, stating, “The IRS is only scratching the surface of the potential role whistleblowers can play in collecting tax from big-time tax cheats….[including] whistleblowers who know details about the latest corporate tax shelters as well as informed whistleblowers who have knowledge about US taxpayers with illegal offshore accounts around the world – especially Hong Kong, Singapore, and Central America.”[2. “Tax Whistleblower Receives $11.6 Million Dollar Award.” August 31, 2015. http://www.corporatecrimereporter.com/news/200/tax-whistleblower-receives-11-6-million-dollar-award/#sthash.sZyK3cpB.dpuf]

These cases serve as an important reminder that false claims lawsuits are not solely limited to healthcare and government contracting – and relators with information about substantial tax fraud are encouraged to report their evidence as well.

Latest IRS whistleblower data

In a report detailing fiscal year 2014, the IRS seemingly received a higher number of whistleblower claims, yet settled fewer cases for less recovery than in years past. For instance, the IRS received 352 submissions for a total of 2,282 claims in FY 2014, whereas it received 355 submissions totaling 1,578 claims in FY 2013. According to the data, the IRS apparently paid only two whistleblower awards in FY 2014 under the Rule 7623(b) program, which pertains to tax fraud of $2 million or more.

Contact Berger Montague today

If you are aware of possible large-scale tax fraud and would like to discuss your information with a reputable whistleblower attorney, contact Berger Montague today.

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By | 2018-03-25T11:58:59+00:00 October 5th, 2015|Tax Fraud|