How to Report Offshore Tax Havens to the IRS and Get Rewarded

Under the IRS Whistleblower Program, U.S. whistleblowers who provide information about offshore tax havens that lead to the recovery of taxes, penalties, and interest may be eligible for a reward.

Updated

May 10, 2025

Report Offshore Tax Haven
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Under the IRS Whistleblower Program, tax whistleblowers who provide information about offshore tax havens that lead to the recovery of taxes, penalties, and interest may be eligible for a reward. The tax, penalties, interest, and other amounts in dispute must be at least $2 million for individuals or $5 million for corporations.The information provided by the whistleblower must lead to the successful collection of taxes, penalties, interest, and other amounts in dispute.

Furthermore, those who report money laundering through the Anti-Money Laundering (AML) program may be eligible for rewards as well. Any individual who provides useful information or assistance to law enforcement in the investigation or prosecution of money laundering offenses may be eligible for a reward between 10% and 30% of the sanctions collected against a money launderer. Award amounts vary depending on the type of information submitted.

Continue reading to learn more about reporting offshore tax havens and how to get a whistleblower reward from the IRS for reporting U.S. citizens or corporations to the IRS, or for reporting money laundering to FinCEN under AML.

Page Contents hide
1. Qualifying for an Award
2. Steps to Blow the Whistle on Offshore Tax Violations
3. Other Notable Cases
4. Our Firm’s Cases
5. Relevant FAQs
6. Latest News & Insights
7. FAQs

Qualifying for an Award

As stated above, under the IRS whistleblower reward program, whistleblowers are eligible for rewards if the tax, penalties, and interest involved in the case exceed $2 million for individuals or $5 million for corporations. To qualify for a reward for reporting offshore tax haven, a whistleblower typically must meet the following qualifications:

  • The whistleblower must have original and specific information about the offshore tax haven that has not been publicly disclosed.
  • The information provided by the whistleblower must be credible and verifiable.
  • The offshore tax haven must be considered illegal or fraudulent under the laws of the country where it is located.
  • The whistleblower must provide the information to the appropriate authorities, such as the Internal Revenue Service (IRS) or the Department of Justice (DOJ), in a timely manner.
  • The whistleblower must cooperate fully with the authorities during the investigation and any subsequent legal proceedings.
  • The information provided by the whistleblower must lead to the successful enforcement of the law against the offshore tax haven and the recovery of any taxes owed.
  • The whistleblower must not have participated in the illegal activities related to the offshore tax haven.

Eligibility for rewards under the anti-money laundering law may also vary depending on the jurisdiction and the specifics of the case. AML applies to individuals who work in the financial industry, such as bank employees, as well as members of the general public who may have knowledge of suspicious financial activity. Both US and foreign whistleblowers are eligible under the new AML laws, which were passed in December 2022 (read press release). 

Steps to Blow the Whistle on Offshore Tax Violations

IRS

It is not required to have a whistleblower attorney to report offshore tax violations to the IRS. However, hiring an attorney who is experienced in whistleblower cases may be beneficial as they can provide legal advice and representation throughout the process.

In general, the process is as follows:

  • Gather all relevant information and evidence of the offshore tax violation. This may include documents, emails, or other evidence of illegal activities related to offshore tax evasion.
  • Contact the appropriate government agency or law enforcement agency that handles offshore tax violations. This may be the Internal Revenue Service (IRS) in the United States or the HM Revenue and Customs (HMRC) in the United Kingdom.
  • Provide the agency with the evidence and information you have gathered, along with your contact information.
  • The agency will then investigate the matter and take appropriate action, which may include issuing fines, penalties, or other legal action against the individual or entity involved in the offshore tax evasion.
  • In some cases, the agency may offer you a reward for providing information that leads to the successful prosecution of an offshore tax violator.

AML

If you’d like to file an anti-money laundering claim, you’ll need to gather important information and documentation, which may include bank statements, transaction records, and any other evidence that supports your claim. Once you’ve done that, you can contact the appropriate government agency – in the United States, the Financial Crimes Enforcement Network (FinCEN) is responsible for enforcing AML laws.

Once you’re ready, submit your claim to FinCEN (or with an attorney). Depending on the agency you are reporting to, you may be able to submit your claim online, by mail, or in person. Be sure to include all relevant documentation and a clear explanation of your claim. Wait for FinCEN to review your and determine if further action is necessary. This process can take several weeks or months, so it’s important to stay patient. However, follow up if you haven’t heard back in a reasonable time, just to ensure the claim is being processed.

Again, blowing the whistle on offshore tax violations or money laundering can be a complex and risky process, and it is advised to consult with an attorney or other legal expert before taking any action.

Other Notable Cases

Hervé Falciani – In 2008, Falciani, a former employee of HSBC’s Swiss private bank, leaked information about thousands of clients with offshore accounts, which revealed widespread tax evasion by wealthy individuals and corporations. This led to investigations and criminal charges against several individuals and the bank agreeing to pay a $300 million settlement.

Richard Weber – In 2014, Weber, the Chief of IRS Criminal Investigation, came forward as a whistleblower to expose the agency’s inadequate response to identifying and investigating offshore tax fraud. This led to reforms and increased resources for the IRS to tackle offshore tax evasion.

Dan Cruickshank – In 2015, Cruickshank, a former director at Credit Suisse, came forward as a whistleblower to expose the bank’s role in facilitating tax evasion by US citizens. This led to the bank agreeing to pay a $2.6 billion fine and Cruickshank receiving a $54 million reward.

John Doe – In 2016, an anonymous whistleblower known as John Doe filed a lawsuit against UBS alleging the bank had helped US citizens evade taxes by hiding assets in offshore accounts. This led to the bank agreeing to pay a $230 million settlement and John Doe receiving a $44 million reward.

Our Firm’s Cases

Relevant FAQs

Latest News & Insights

FAQs

An offshore tax haven is a jurisdiction with low or no taxes that individuals or companies can use to minimize their tax liabilities. These jurisdictions often have strict confidentiality laws, making it difficult for other countries to access information about the individuals or companies using them for tax purposes. Offshore tax havens are often used for tax evasion and avoidance, which can lead to controversy and negative perceptions of the jurisdictions that offer these services. 

Popular offshore tax havens for U.S.citizens include:

  • The Bahamas
  • Bermuda
  • The Cayman Islands
  • Jersey
  • Guernsey
  • Isle of Man
  • The British Virgin Islands
  • Luxembourg
  • Hong Kong

There are many ways in which a U.S. citizen can avoid taxes through an offshore tax haven. One of the most popular methods is to invest in an offshore bank account in a tax haven jurisdiction, such as the ones mentioned above.

Other popular tactics include:

  • Purchase real estate in a tax haven jurisdiction and use it as a rental property
  • Invest in offshore trusts or foundations in a tax haven jurisdiction
  • Use offshore company structures, such as a holding company or a shell company, to hold and manage assets in a tax haven jurisdiction
  • Use offshore insurance policies or annuities to hold and manage assets in a tax haven jurisdiction
  • Use offshore investment vehicles, such as hedge funds or mutual funds, to hold and manage assets in a tax haven jurisdiction.

Offshore tax shelters are legal arrangements that allow individuals or businesses to reduce or eliminate their tax liability by transferring income or assets to a jurisdiction with lower or no tax rates. This is typically done by setting up a holding company or trust in a tax-friendly country, such as the Bahamas or the Cayman Islands, and transferring assets or income to that entity.

The offshore entity is typically structured in a way that allows it to receive income or assets without being subject to tax in the country where it is based. For example, a holding company might be set up in the Bahamas and be exempt from taxes on its income because it is not conducting business in the Bahamas.

Individuals or businesses can then use the offshore entity to receive income or assets from other sources, such as investments or dividends from a foreign subsidiary, without incurring tax liability in their home country. This allows them to reduce their overall tax burden and potentially increase their profits.

Offshore tax shelters are legal, but they are often criticized for allowing wealthy individuals and corporations to avoid paying their fair share of taxes. Some governments have introduced measures to combat offshore tax shelters and prevent individuals and businesses from using them to avoid paying taxes.

People should blow the whistle on offshore tax violations to ensure fair and equal tax treatment, prevent tax evasion and money laundering, support the integrity and transparency of financial systems, and promote global cooperation and combat tax avoidance.

It is important to report offshore tax havens for several reasons:

  • To ensure fair and equal tax treatment for all individuals and businesses. Offshore tax havens often allow individuals and businesses to avoid paying their fair share of taxes, which can create an unfair advantage for those who use them.
  • To prevent tax evasion and money laundering. Offshore tax havens are often used to conceal illegal activities such as tax evasion and money laundering, which can have negative impacts on economies and societies.
  • To support the integrity and transparency of financial systems. Reporting offshore tax havens can help to ensure that financial systems are transparent and accountable, which is essential for the proper functioning of economies and markets.
  • To promote global cooperation and combat tax avoidance. Reporting offshore tax havens can help to facilitate international cooperation in the fight against tax avoidance, which can benefit economies and societies around the world.

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