The Fraud Lawyers of Kohn, Kohn & Colapinto Can Help You Navigate the Intricacies of Reporting Tax Fraud and Anonymously Obtain an IRS Whistleblower Reward
Kohn, Kohn & Colapinto is the firm behind the world’s largest Internal Revenue Service (IRS) tax fraud whistleblower case. In 2012, Bradley Birkenfeld, a UBS banker who blew the whistle on U.S. offshore Swiss bank accounts, received an IRS whistleblower reward of $104 Million.
In addition to fighting for our international whistleblower clients, we seek to protect and enhance legal protections for tax fraud whistleblowers. KKC has filed numerous rulemaking petitions with the IRS Whistleblower Office, filed extensive briefs to the IRS, and testified at IRS rulemaking hearings to strengthen the tax whistleblower program. We help write the rules on whistleblowing, ensuring those who report tax fraud get the most substantial reward they can for putting their career, privacy, and livelihood on the line.
Since 1988, our landmark cases and public interest pro bono advocacy has transformed IRS whistleblower law. We worked for years promoting reforms that made it possible for whistleblowers to receive award payments for criminal penalties and civil forfeitures, not just tax payments made under title 26.
IRS Whistleblower Reward Amount (Updated 2020)
The Internal Revenue Act has a highly effective tax whistleblower law that permits any IRS whistleblower to obtain between 15-30% of any collected proceeds received by the government as a result of the original information filed by the whistleblower. If the case deals with an individual, his or her annual gross income must be more than $200,000, or the proceeds in dispute exceed $2,000,000. If the whistleblower disagrees with the outcome of the award claim, he or she can appeal to the Tax Court.
The IRS Whistleblower Office of the Internal Revenue Service Pays Rewards to Those Who Report Criminal and Non-Criminal Tax Frauds
The biggest misconception concerning the IRS whistleblower program is that it only covers tax frauds. The first IRS whistleblower law included tax frauds and the underpayment of taxes. However, there was widespread disagreement as to the scope of the law, and whether or not the law covered criminal tax frauds and sanctions paid for IRS-related infractions.
The fraud lawyers of Kohn, Kohn, and Colapinto, working with the National Whistleblower Center and tax attorney Dean Zerbe led the fight to clarify the tax whistleblower law. In 2017, the team won a landmark ruling in Tax Court, broadening the scope of the tax whistleblower law.
The Department of Treasury appealed this ruling. While the case was under appeal, Congress amended the law. The law now includes any law or regulation for which a form is filed with the IRS. Also within the jurisdiction of the IRS criminal division.
Types of IRS tax fraud include:
- Offshore Tax Havens: a company knowingly moves money to a bank in another country to avoid reporting taxable income;
- Shell Accounts: setting up multiple bank accounts and circulating money across these accounts to propagate tax benefits;
- Money Laundering: the activity of masking or concealing the source of illegally-obtained money by transferring to foreign banks or legitimate businesses;
- False Reporting: reporting incorrect information on tax returns, such as underreporting revenues or taxable income;
- Falsely Operating Under Tax-Exempt Status: claiming a tax-exempt status to receive tax credits or deductions;
- Pyramiding: withholding employee taxes and intentionally not remitting taxes to the IRS, then filing bankruptcy and starting another company;
- False Payroll Tax Returns: preparing false payroll tax returns understating the number of wages on taxes owed;
- Failure to Pay Payroll Taxes: failing to file employment tax returns are methods commonly used to evade employment taxes.
These are ways companies, and high-net-worth individuals avoid paying taxes, which costs the IRS approximately $450 billion each year. It’s essential IRS whistleblower law protect and reward those who report this rampant and pervasive fraud.
How to Report Someone to the IRS
Before you become an IRS whistleblower, you should contact a fraud lawyer to ensure you’re submitting the proper forms and documents. There are very specific requirements, therefore, if filing on your own, you may be missing out on an opportunity to receive a substantial IRS whistleblower reward.
How to report IRS fraud:
- Report Tax Fraud to the IRS Whistleblower Office: this is a department within the IRS and is who’s sole role is to investigate and review reports of fraud. All fraud claims must be submitted to this department;
- Obtain Solid Evidence of Tax Fraud: when reporting tax fraud to the IRS Whistleblower Office, you will need to provide evidence that is “without a doubt” and “without questions” credible and accurate;
- Meet Recovery Requirements of $2 Million: If the taxes, penalties, interest and other amounts in dispute exceed $2 million, or an individual has gross income over $200,000, and a few other qualifications met, the IRS will pay 15 percent to 30 percent of the amount collected;
Hire an Experienced Tax Fraud Lawyer to Improve a Claim: when submitting a claim, it’s advised an IRS whistleblower work with a fraud lawyer to maximize their chances of receiving an award.
IRS Whistleblower Cases We’ve Fought and Won
Anonymous IRS whistleblowers, identified only as Whistleblower 21276-13W and Whistleblower 21277-13W, obtained a reward of $17,791,607 in the first tax whistleblower case ruling that tax whistleblowers were entitled to collect rewards based on criminal fines and penalties obtained by the Department of Justice. Congress cited this landmark decision, amending the IRS tax law to ensure criminal penalties were explicitly included in the IRS whistleblower law.
In 2018, Kohn, Kohn & Colapinto’s tax whistleblowers obtained over $158 million in awards, the most compensation for whistleblowers ever received in a single year by any firm under the IRS tax whistleblower law, setting yet another record-breaking achievement.