Earlier this week, the Ferraro Law Firm, a trial law firm based in Florida, submitted a tax whistleblower submission of more than $2 billion (yes, with a b) to the recently created IRS Whistleblower Office. The submission is the largest ever made to the IRS Whistleblower Office.
The IRS Whistleblower Office is responsible for assessing and analyzing incoming tips. After determining the degree of credibility of the tips, the office will assign the information to the appropriate IRS office for further investigation.
The allegation at the heart of this most recentt case is that one of the world’s largest companies has underpaid its U.S. tax liability by more than two billion dollars.
Why come forward? A tax whistleblower can receive of between 15% and 30% of the amount the IRS collects as a result of their information if the information provided is substantial. Yep, that means that the reward if this suit pans out could be a whopping $600 million. Not bad, huh?
Of course, not all whistleblower suits are in the billions. The IRS Whistleblower Office will also process tips received from individuals who spot tax problems in their every day workplace.
So, which company is it? Nobody’s saying – yet. But you can bet that if it’s significant enough, we’ll hear about it.
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I believe that confidentiality is of the utmost importance. In fact, our firm will guarantee the confidentiality of a tax whistleblower or forfeit our fee. Therefore, we will not disclose the number of tax whistleblower cases we handle, the dollar amount, or any other information including the background of the taxpayer so as to protect our clients and the tax whistleblower process.
I think this post examines the current legal structure allowing rewards for informants who provide information to assist the IRS in the enforcement of the tax laws. IRS data suggest that informants are a cost-effective means to enhance tax enforcement. The Tax Relief and Health Care Act of 2006 introduced a separate whistleblower award program that provides more significant monetary rewards (up to 30 percent of the amount collected) and somewhat greater certainty in the payment of such rewards, including a process for judicial review of claim determinations in the Tax Court.