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IRS Tax Cheat Whistleblower Awarded $38 Million Reward

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report income tax fraud

On Friday, October 26th, the Ferraro Law Firm of Washington D.C. announced that one of its clients – a whistleblower that reported a tax avoidance scheme to the IRS – was awarded a $38 million award from the IRS for the information.

The law firm would not name the corporation involved in the scheme, but mentioned that it was a Fortune 500 company. The attorney told the Wall Street Journal that the client’s information led to the recovery of up to $254 million in corporate taxes. (1)

The claim stemmed from the whistleblower protection program enacted by Congress in 2007 to encourage whistleblowers to report income tax fraud. The program included awards ranging from 15% to 30% of taxes that the IRS is able to recover.

Ferraro Attorney Scott Knott told Wall Street Journal that the IRS conducted its review of the tax claim without ever giving away the identity of the whistleblower, who most likely continued working at the company over the four years that the IRS took to complete its tax review.




Report Income Tax Fraud and Get a Reward

In January of this year, Top Secret Writer’s reported on the IRS’ promise that 2012 would bring “a number of awards”. This most recent $38 million reward proves that the IRS is keeping its word in encouraging and rewarding tax fraud whistleblowers. (1)

The reward amounts are not created by the IRS, they are determined by law. According to the whistleblower law enacted by Congress, the IRS must pay out an award ranging from 15 to 30 percent depending how how much the IRS is able to collect in taxes due thanks to the whistleblower information.

According to the Ferraro Law Firm press release, the IRS not only hid the identity of the whistleblower during the entire investigation, but it didn’t even let the target corporation know that a whistleblower even existed in the first place. Gregory Lynam told reporters:

“The target corporation doesn’t even know that it had a whistleblower, and they shold never know, because the IRS did not inform the taxpayer that they ahd help from us on the sophisticated tax issues involved in this case.”

According to the law firm, the tax issues involved in this case were not so severe as to be considered a form of “tax fraud”, but instead might be considered by most as a form of “aggressive corporate tax planning.”

The increase in whistleblower submissions may not only stem from the creation of whistleblower protections by Congress, but law firms like Ferraro may also be aggressively pursuing such clients due to the large dollar amounts possible in such corporate tax reward payouts.

Whether or not lawyers, whistleblower protections or the reward money itself is driving the increase in whistleblower submissions, one thing that is for certain is that with its whistleblower reward program, the IRS and the U.S. government has created one of the most effective methods to identify and collect unpaid taxes.


References & Image Credits:
(1) Wall Street Journal
(2) PR Newswire
(3) Chicago Tribune
(4) Access North GA

Originally published on TopSecretWriters.com

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Ryan is the founder of Top Secret Writers. He is an IT analyst, blogger, journalist, and a researcher for the truth behind strange stories.
 
Lori is TSW's editor. Freelance writer and editor for over 17 years, she loves to read and loves fringe science and conspiracy theory.

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Gabrielle is a journalist who finds strange stories the media misses, and enlightens readers about news they never knew existed.
Sally is TSW’s health/environmental expert. As a blogger/organic gardener, she’s investigates critical environmental issues.
Mark Dorr grew up the son of a treasure hunter. His experiences led to working internationally in some surprising situations!
Mark R. Whittington, from Houston, Texas, frequently writes on space, science, political commentary and political culture.

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