IRS Whistleblower (1 Viewer)

[chet]

Anyone familiar with this process? Is it possible to remain anonymous? Asking for a friend.

 

[Doctor Detroit]

Like to report someone who is breaking the law? Google "how to report tax fraud."

I would probably call the hotline AND submit the form in writing. You can receive a percentage of the claim too.

If it's for a really large amount or in corporate tax fraud, I'd talk to your lawyer first.

 

[chet]

Like to report someone who is breaking the law? Google "how to report tax fraud."

I would probably call the hotline AND submit the form in writing. You can receive a percentage of the claim too.

If it's for a really large amount or in corporate tax fraud, I'd talk to your lawyer first.

Multiple 8 figures.

 

[johnnycakes]

I don't know much about the whistleblower program but it seems not that unusual to read about a case where someone blew the whistle and then the IRS didn't want to pay for some reason.

Also be ready for an audit of your own returns. CID tend to think of you are that close to wrongdoing, maybe the whistleblower's return may not be all that clean either. It's just the way they think.

Here is the form.

http://www.irs.gov/pub/irs-pdf/f211.pdf

 

[johnnycakes]

The IRS just released its 2014 report to Congress on the Whistleblower program. A couple of points jump out right away:

• The IRS pays awards from collected proceeds which result from an audit or investigation. Payments are not made until the taxpayer has exhausted all appeal rights and the statutory period for the filing of a claim for refund has expired, or been waived by the taxpayer. Therefore, typically the IRS does not make payments for five to seven years after the whistleblower has filed a claim.
• Unlike other laws that encourage whistleblowers to report information to the government, section 7623 does not prohibit retaliation against the whistleblower. When the whistleblower is an employee of the taxpayer, retaliation can take the form of a job-related action. In other cases, whistleblowers may face threats of physical harm or damage to economic interests. In such cases, whistleblowers reporting information under section 7623 may have recourse under state law, but Federal law does not appear to provide a remedy.
• the IRS tells whistleblowers it may identify them if they are an essential witness in a judicial proceeding or if ordered to do so by a court of competent jurisdiction.
• In some criminal cases, information available to the Whistleblower Office on the extent of the whistleblower’s contribution may be limited by grand jury secrecy rules. The Whistleblower Office is not allowed to review and consider grand jury information protected from disclosure under the Federal Rules of Criminal Procedure, unless an exception to the secrecy rules is granted, which is done on a case-by-case basis. Without that information, it may not be possible for the Whistleblower Office to independently assess the extent of the whistleblower’s contribution when making a determination regarding an award under section 7623

 

[jon_mx]

Get the referral agreement in writing before making the referral.

 

[AAABatteries]

Get the referral agreement in writing before making the referral.

Lol

 

[johnnycakes]

From today's WSJ:

The Internal Revenue Service awarded $11.6 million to a whistleblower this week, and experts say the agency could make as many as 10 more large payouts in coming weeks to people who have reported massive tax cheating.

“Large awards are finally starting to flow,” says Scott Knott, an attorney with the Ferraro Law Firm in Miami, which has more than 100 tax whistleblower cases before the IRS. This year’s number could equal or exceed the total of 11 large awards made between late 2006, when Congress expanded the tax whistleblower program to allow the bigger payouts, and the end of fiscal 2014, he said.

Under this program, whistleblowers who report cases involving $2 million or more of unpaid taxes are eligible for awards of as much as 30% of what the IRS recovers. (A program for cases involving less than $2 million of unpaid taxes generally issues awards of as much as 15%.) The IRS is expected to make the large awards by Sept. 30, when the government’s fiscal year ends.

The public may never learn about specific payments, however, as IRS statistics obscure them on privacy grounds. The agency also doesn’t break out how much revenue the large-award program has collected, although since 2010 it has collected taxes in about 40 cases.

To date only one large-award recipient has publicly identified himself: Bradley Birkenfeld, who famously blew the whistle on Swiss banking giant UBS AG, which later admitted it encouraged U.S. taxpayers to hide money abroad. Mr. Birkenfeld received an award of $104 million, apparently the largest ever.

No Easy Money
While the idea of turning in a tax cheat is tempting, the road to a large whistleblower award is usually long, arduous and highly uncertain. For one thing, the requirements are stiff: Whistleblowers must offer conclusive evidence of cheating to the IRS, with names, dates and other relevant information. In fiscal 2014, the IRS had more than 14,000 total submissions for both award categories, and experts think most of them were rejected.

“I tell clients that making an IRS submission, even for a strong case, is like baiting a hook. The fish doesn’t always bite,” says Mr. Knott.

According to Mr. Zerbe, the IRS is especially interested in “one-off, ‘bespoke’ tax shelters” that it might have a hard time detecting, and secret offshore accounts, especially in Hong Kong, Singapore and Panama.

Mr. Knott says the IRS also finds corporate cases that extend over several years attractive, so that if the statute of limitations expires for one year, the IRS can still pursue taxes for other years.

The agency also is on the lookout for taxpayers who cut corners on repatriating foreign earnings, specialists say.

Filing a Claim
For those that decide to file for a whistleblower award, expert help is advisable. Large-award claims are highly technical and virtually impossible for do-it-yourselfers to compile and submit, say experts. Most successful claimants have used attorneys who specialize in tax whistleblower cases. Often the attorneys’ fees, which are deductible from the award, come to 30% to 40% of the total amount.

Even for those who recruit such help, the wait is long. Large-award cases typically take about seven years from start to finish, says Mr. Knott. That is partly because the IRS generally won’t make a payment to a whistleblower until the tax cheat’s deadline to appeal the case has passed.

Often the taxpayer hears nothing from the IRS for months or years at a time. Eric Young,a whistleblower attorney with McEldrew Young in Philadelphia, says, “I have had strong cases pending for over four years involving hundreds of millions in tax. They appear to be languishing in the system.”

And even if a whistleblower manages to jump through all those hoops, their awards are taxable. When the IRS cuts a check, it withholds tax as well. The upshot is that after attorney’s fees and taxes, the net amount to the whistleblower can be less than half the stated award.

 

[chauncey]

snitches get stiches