The Internal Revenue Service has awarded a whistleblower $13.6 million for providing information that led to the government collecting over $52.6 million in taxes, penalties and interest in the case.
Attorneys Stephen Kohn of Kohn, Kohn and Colapinto and Dean Zerbe of Zerbe, Miller, Fingeret, Frank & Jadav LP thanked the whistleblower, a joint client, “for the courage to come forward and put the light on tax evasion by the wealthiest of the wealthy.”
The award, the attorneys said in their joint statement, “will hopefully encourage other whistleblowers to come forward. The IRS whistleblower award program is working.”
Kohn noted that this award “is one of the first, if not the first, award made by the IRS whistleblower office under the new law that clarified that tax whistleblowers should get awards based on taxpayer’s paying criminal penalties or FBAR” for foreign financial accounts.
As Kohn, Kohn noted in a February blog post, The Bipartisan Budget Act of 2018, signed into law by President Donald Trump, “included two key whistleblower qui tam amendments fixing loopholes in the IRS and Dodd-Frank Act whistleblower reward laws.”
The amendments, the law firm writes, “ensure that whistleblowers who expose criminal tax frauds are covered under the IRS whistleblower law, and close a tax loophole that double-taxed Dodd-Frank Act whistleblowers on their rewards, reducing payments by as much as 80%.”
The attorneys said in their joint statement that “Tax fraud whistleblowers should be heartened by the IRS whistleblower office’s decision to embrace this important clarification of the law. The IRS whistleblower law is well on its way to being as important to the federal government in combating fraud as the False Claims Act.”
In his FY 2017 report to Congress, Lee Martin, director of the IRS Whistleblower Office, stated that the Whistleblower Program, over the past two years, has paid “an astounding” 660 awards versus 655 awards paid over the prior six-year period between FY 2010 and 2015.
In fiscal 2017, the Whistleblower Office made 242 awards to whistleblowers totaling $33.9 million (before sequestration), which includes 27 awards, representing a 50% increase in the number of awards as compared to 18 awards paid in fiscal 2016, Martin stated.
That being said, the total number of awards and the total amounts collected were down by 42% and 48%, respectively, he reported.
Award dollars to whistleblowers as a percentage of amounts collected increased to 17.8% from 16.6%, Martin’s report states.
Kohn and Zerbe also stated in their joint release that the Whistleblower Office under the leadership of Martin “is clearly dedicated to cutting through the red tape and the bureaucratic grind to get major awards into the hands of whistleblowers.”
The two attorneys also voiced their confidence in new IRS Commissioner Charles Rettig, who they maintain “is quite knowledgeable about the IRS whistleblower program [and] will build on this success.”
The anonymous whistleblower stated: “I want to thank my lawyers Stephen Kohn and Dean Zerbe for their extraordinary hard work and diligence. No one thought I would get this award. But with Steve’s years of experience representing qui tam whistleblowers and Dean’s firsthand knowledge having written the IRS whistleblower law while working as tax counsel on the Senate Finance Committee — coupled with their deep understanding of the IRS and the tax laws — I knew I was in good hands.”