HomeIRS Whistleblower Receives $16.8 Million Award for Exposing Widespread Tax Evasion Scheme

IRS Whistleblower Receives $16.8 Million Award for Exposing Widespread Tax Evasion Scheme

Published On: September 15th, 2022Categories: Tax Fraud, Whistleblower News and Qui Tam Blog

Whistleblower attorneys Stephen M. Kohn and Dean Zerbe are pleased to announce that a joint client – who wishes to remain anonymous – received an IRS whistleblower award of $16.8 million. The whistleblower provided the IRS with information that led to an enforcement action against 86 high-wealth individuals who had engaged in a sophisticated illegal tax evasion scheme. The enforcement action resulted in nearly $70 million dollars being returned to the U.S. Treasury.

“On behalf of our client and ourselves, we very much want to thank the new Director of the IRS Whistleblower Office, Mr. John Hinman, for this award for our client,” said Stephen M. Kohn, founding partner of the whistleblower law firm Kohn, Kohn and Colapinto. “A particular special thanks to Ms. Peggi Bockman of the Whistleblower Office for her hard and dedicated work on this award – and also thanks very much to Ms. Dawn Applebaum whose constant leadership and commitment to the IRS whistleblower program has been invaluable. Thanks also to the IRS examiners and CI agents who recognized the benefit of the whistleblower’s information. Finally, Dean and I are honored to represent the whistleblower, who showed great courage and conviction in coming forward and speaking out against this tax fraud.”

“This award underscores the enormous importance of the IRS whistleblower program in assisting the IRS in successfully bringing action against very wealthy individuals who are seeking to evade taxes,” said Dean Zerbe of the law firm of Zerbe, Miller, Fingeret, Frank & Jadav. “As the IRS looks to manage the significant new funds provided by Congress, it is critical that the IRS recognize and embrace the value of the whistleblower award program. The whistleblower program allows for the IRS to better target its examination resources on the worst actors. The whistleblower award program is the best tool the IRS has to go after tax evasion by the very wealthiest – but it is too often forgotten or ignored. My hope is with the new leadership at the whistleblower office those days are in the past.”

The anonymous whistleblower stated: “I want to thank my lawyers Stephen Kohn and Dean Zerbe for their unfailing efforts in obtaining this award. Their patience and good counsel were key for my obtaining this award.”

“Congress can build on the success of the IRS whistleblower award program by passing the bicameral and bipartisan IRS Whistleblower Program Improvement Act of 2021 – sponsored by Chairman Wyden (D-OR) and Senator Grassley (R-IA) in the Senate and Congressman Thompson (D-CA) and Kelly (R-PA) in the House. The bill has important reforms – such as strengthening the rights of whistleblowers in Tax Court as well as encouraging the IRS to make timely awards – that will go far in making a good program even better,” added Kohn.

“While Congress can take important legislative changes to improve the program, Treasury and the IRS can take their own steps to strengthen the whistleblower program. These include: bringing in whistleblowers to work hand-in-hand with the IRS exam team; improving communication with whistleblowers; expanding discretionary awards for whistleblowers; smarter review of whistleblower submissions through an enterprise case management system; and, sending the word out that whistleblowers are welcome. But, it is issuing awards – such as today’s – that will do more than anything to encourage other whistleblowers to come forward,” said Zerbe.

Kohn and Zerbe – both members of the Tax Whistleblower Attorney Group – have jointly represented a number of tax whistleblowers – including Bradley Birkenfeld, the UBS whistleblower who received an award of $104 million from the IRS in 2012. In addition, they successfully represented a whistleblower in the landmark Tax Court case of Whistleblower 21276-13W v. IRS (147 TC 121-2016) which resulted in a major win for tax whistleblowers with the expansion of the definition of “collected proceeds” to include criminal fines and civil forfeitures for whistleblower awards.

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