ATTORNEY NEWSLETTER
How IRS Whistleblower Program Works
Improvements To Program Passed By Senate
Protection from Employer Retaliation
The Internal Revenue Service (IRS) rewards people who blow the whistle on corporations who fail to pay the tax that they owe just as the False Claims Act rewards persons who submit fraudulent claims for payment to the government. 31 U.S.C. § 3729 et seq. (False Claims Act) .I.R.C. § 7623(b)(IRS Whistleblower Program). 2022 total reward figures have not been announced, but at least one large $8.8 million reward was granted to a whistleblower whose information enable the IRS to recover $35 million in taxes owed to the government for a single corporate taxpayer. Any type of tax fraud may be the basis of an IRS whistleblower application but one primary form of tax avoidance is offshore schemes that shelter income from U.S. taxation. These schemes also often violate other federal laws, including banking laws and anti-money laundering laws. See, e.g., Reports of Foreign Bank and Financial Accounts Act (FBAR) (31 U.S.C. § 5314); Foreign Account Tax Compliance Act (FATCA) (26 U.S.C. § 1471 et seq.); and anti-money laundering laws, 18 U.S.C. § 1956 et seq. The Senate passed legislation late last year improving the program, as discussed below. Evans Law Firm, Inc. represents individuals with credible information of offshore tax avoidance schemes or other tax fraud or money laundering schemes and can help you submit information of tax fraud and all related violations of the law to the government and present your evidence with a goal toward a reward if the IRS recovers. If you have credible information of tax fraud, call us today at (415)441-8669. Our toll-free number is 1-888-50EVANS (888-503-8267).
Anti-Money Laundering Whistleblower Improvement Act
On December 7, 2022, the U.S. Senate voted unanimously to expand whistleblower incentives and strengthen whistleblower protections by passing the Anti-Money Laundering Whistleblower Improvement Act. The bill would bolster the anti-money laundering whistleblower program by adding support for whistleblowers who report violations of U.S. sanctions laws, guaranteeing that whistleblowers will be paid a minimum award amount, and providing a funding mechanism to pay whistleblower awards.
Specifically, the proposed legislation:
- Enables whistleblowers who disclose a violation of the International Emergency Economic Powers Act, the Foreign Narcotics Kingpin Designation Act, and/or the Trading with the Enemy Act that leads to a successful enforcement action;
- Entitles whistleblowers to an award of between 10 and 30 percent of the value of fines collected as a result; and
- Creates a $300 million fund to pay whistleblower awards from fines collected by the Justice and Treasury Departments.
If signed into law, this legislation could significantly expand the potential monetary rewards available to whistleblowers under the AMLA, further incentivizing whistleblowers to report potential violations of the sanctions laws. The bill is now before the House.
How An IRS Whistleblower Case Works
The IRS program sets forth a detailed procedure for submitting whistleblower information. Individuals start a case by submitting a Form 211 “Application for Award for Original Information” under penalty of perjury. A whistleblower may not bring an independent action if the IRS decides not to pursue an action. However, the whistleblower may be eligible for an award if the IRS does successfully pursue a judicial or administrative action based upon the information submitted. Where the collected proceeds exceed $2 million or, if the taxpayer is an individual and their gross income exceeds $200,000, the IRS is required to pay an award to the whistleblower, provided other statutory qualifications are met. The range of such an award is typically between 15 percent and 30 percent of the amount collected.
Protection From Retaliation
Employees who discover their employer’s tax evasion maneuvers are protected from retaliation by their employers. See 26 U.S.C. § 7623. Despite this protection, employers may still retaliate. If they do, employees can fight back. Evans Law Firm, Inc. can represent you in any suit for employer retaliation in addition to representing them before the IRS with their whistleblower claim. Remedies for wrongful retaliation by an employer include reinstatement, double back pay, interest, and attorneys’ fees and costs for bringing your lawsuit. See 26 U.S.C. § 7623.
Contact Us
Ingrid M. Evans represents individuals with credible, original information of any kind of tax fraud, including offshore tax avoidance measures, and use of foreign corporations and accounts to avoid taxation or the like. Ingrid can be reached at (415) 441-8669, or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. Our toll-free number is 1-888-50EVANS (888-503-8267). Ingrid also handles whistleblower actions under the Financial Reform, Recovery, and Enforcement Act (FIRREA/FIAFEA), the Commodities Futures Trading Commission Whistleblower Program, the Securities and Exchange Commission Whistleblower Program, False Claims Act cases, the FINRA Whistleblower Office and the California False Claims Act.
