According to a new bombshell report by the New York Times, a whistleblower has come forward testifying that Credit Suisse, who previously settled claims with the U.S. Government that it helped rich Americans hide money from the IRS and evade taxes, continued to brazenly help these individuals continue to evade U.S. tax laws. See New York Times. If true, the bank could be on the hook for tens of millions, if not more, in additional penalties for violating the prior settlement agreement—and the whistleblower stands to get a percentage of any recovered monies from Credit Suisse or the U.S. citizens the bank helped cheat on their taxes.
The IRS Whistleblower Programs Authorize Payments to Whistleblowers of up to Thirty Percent of the Recovered Taxes
Under Internal Revenue Code section 7623, the IRS pays money to people who provide “specific and credible information” regarding the non-payment of taxes by U.S. citizens and residents. If the IRS uses information provided by the whistleblower, the whistleblower may earn up to 30 percent of the additional tax, penalty and other amounts it collects. See IRS Whistleblower Reward.
If the information provided to the IRS leads to a recovery in excess of $2 million, the whistleblower is entitled to between 15-30% of the recovery and the IRS cannot refuse to pay the whistleblower. For amounts under this threshold, payment to the whistleblower is discretionary and usually a smaller percentage. Recovery here is not limited solely to the unpaid or underpaid taxes, but includes fines, forfeitures, and nearly all proceeds that the IRS is statutorily allowed to collect.
Who is a Tax Whistleblower?
A whistleblower is someone who learns of illegal activity and reports it, either internally or to government agencies. See King & Siegel: Whistleblowers. A Tax whistleblower is one who specifically reports to the IRS “specific and credible information” relating to tax “non-compliance.” The information must also be presented properly, and must include (1) a description of the non-compliance; (2) supporting documentary information (such as bank records, emails, copies of accounting materials, or receipts); (3) an explanation of how the whistleblower learned the information, (4) complete disclosure of the relationship between the whistleblower and the tax evader; and (5) must be made under penalty of perjury.
Unlike many other types of whistleblowing, an IRS whistleblower may still be entitled to the IRS bounty when the information provided is based on the public record.
Experienced, Highly Qualified Whistleblower Attorneys
Our employment law legal team is especially well qualified to take on challenging and complicated whistleblower cases. The attorneys who lead our whistleblower practice previously litigated white-collar crime and other complex financial and regulatory cases and are well versed in accounting, regulatory compliance, and government enforcement agencies.
We are experienced with helping clients make protected reports, walking you through preserving important documents without risking liability to yourself, and litigating and resolving claims in court, arbitration, and government agency forums.
Tax whistleblowers have been protected by law for hundreds of years. In California, a number of laws protect whistleblowers. Our top whistleblower attorneys can help you determine if you are a whistleblower. We encourage you to contact us for a free case review if you would like to talk through your situation and better understand your rights. If you have information relating to non-payment of taxes or tax fraud committed by your employer, do not hesitate to contact us today through our website or give us a call at (213) 465-4802 to schedule a free consultation.