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IRS Pays Anonymous Whistleblower USD38m

by Leroy Baker,, New York

01 November 2012

The US Internal Revenue Service (IRS) has paid an award of USD38m to an anonymous whistleblower for providing insider information about a tax avoidance scheme involving a Fortune 500 company.

Neither the name of the whistleblower nor the identity of the company has been revealed. The amount of tax the IRS collected from the company has also not been made public, although it is thought that since the IRS must pay the whistleblower between 15 and 30% of the amount of tax collected by law, the figure could be up to USD250m.

Although the Ferraro Law Firm representing the whistleblower has not commented on the particulars of the case, it has stated that the tax issues involved “were more akin to aggressive corporate tax planning than outright fraud”.

The case was filed early in 2008 and follows a series of similar cases since the establishment of the IRS Whistleblower Office in 2007.

Last month the IRS paid a USD104m award to former banker Bradley Birkenfeld whose information about UBS customers’ offshore banking accounts resulted in a USD780m fine to UBS, 35,000 taxpayers voluntarily repatriating their undisclosed offshore accounts and the collection of USD5bn in back taxes, fines and penalties. His information also indirectly led to revised tax treaty negotiations between Switzerland and the US and to UBS releasing the names of 4,900 US taxpayers, who are currently being investigated.

TAGS: tax | tax avoidance | law | banking | Internal Revenue Service (IRS) | offshore | offshore banking | tax planning | United States | penalties

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