Do I Have a Case?
International Tax Whistleblower Representation
The Tax Relief and Health Act of 2006 established the Tax Whistleblower Program in order to provide a greater incentive for people with knowledge of large scale tax underpayment to disclose their information to the IRS. Some of the main provisions of the Tax Whistleblower Program include:
- Whistleblowers may receive an award consisting of 15% to 30% of all revenue recovered by the IRS, including unpaid taxes, interest, and civil penalties (but not criminal fines or penalties)
- To qualify for an award under the Tax Whistleblower Program established in 2006, the amount in dispute must exceed $2 million
- If reporting on an individual, the individual must earn a gross income of at least $200,000 a year
- You have the right to appeal your reward if you do not feel it fairly compensates you for your contribution to the case
- If the total underpayment does not exceed $2 million, you may still submit a claim for a reward, but the Service has sole discretion over whether or not you will be able to collect
What Types of Disclosures Generally Result in a Whistleblower Reward?
To qualify for a reward under the Tax Whistleblower Program, your disclosure must present concrete, detailed evidence of tax fraud or tax underpayment. Speculative disclosures lacking specific, documented evidence will not earn a reward.
The following information will be helpful to the IRS in pursuing a claim:
- A thorough and detailed explanation of the facts underlying your claim including the amount of underpayment
- An explanation of the legal theory establishing that taxes were underpaid
- An analysis of the accounting issues establishing that taxes were underpaid
- An analysis of any legal issues arising from your claim including any IRS or Court rulings that impact your claim
- Documentation of the underpayment
- A list of witnesses who can corroborate your allegations
The Importance of Timing
The first whistleblower to file a claim will bar subsequent whistleblowers from recovering for the same claim. This is generally known as the first to file bar. The timing of the filing of a claim can therefore be critical to whether you are successful in obtaining a reward. There can also be disputes with other whistleblowers as to whether your whistleblower claim constitutes the same claim as another whistleblower or is distinguishable and therefore entitles you to a separate tax whistleblower reward. Your lawyer should perform this analysis for you and make the appropriate arguments to the Tax Whistleblowers Office. If necessary, your lawyer should be prepared to appeal the decision to the U.S. Tax Court.
Tax underpayment claims and tax fraud claims are subject to varying statutes of limitations depending on the nature of the violation. Some claims can be time barred if they are not timely filed. Your lawyer should perform this analysis for you.
Maximizing your Reward
To maximize your tax reward, you and your lawyer should be prepared to work with the IRS throughout the investigation. Kenney & McCafferty employs a former IRS revenue agent and forensic accountants who can assist the IRS until the completion of the investigation by aiding in the preparation of subpoenas and audit plans. This continued participation can be crucial to maximizing the reward obtained.
If you have knowledge of tax underpayment totaling $2 million or more, please contact our tax whistleblower attorneys today. Kenney & McCafferty will consult with you about your case, without obligation. All communications with Kenney & McCafferty attorneys regarding your case are confidential and protected by attorney-client privilege.
