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Building on $158 Million in Awards Last Year

Washington, D.C. February 19, 2019. The IRS recently released the FY 2018 report on the Whistleblower Program – announcing that the IRS had collected a record-breaking $1.441 billion in taxes, penalties and interest collected thanks to information provided by whistleblowers – up from $190 million the previous year.  The IRS also announced that whistleblowers had received $312 million in awards – an increase from $33 million in awards provided the previous year.

“These eye-blinking numbers of dollars collected and awards given in the recent IRS annual report is the best news of the year for whistleblowers and taxpayers.  The IRS program is now working and working remarkably well.  I’m especially proud that the whistleblowers that Dean Zerbe and I represent as co-counsels account for nearly $725 million of the tax dollars brought into the Treasury through the whistleblower program last year and that our clients received $158 million of the $312 million in awards announced by the IRS,” said Stephen M. Kohn of the whistleblower law firm Kohn, Kohn and Colapinto (KKC).

“I am enormously pleased that the good news from last year keeps rolling for whistleblowers and honest taxpayers.  The IRS recently issued two award letters totaling $88 million dollars to whistleblowers that are represented by one or both law firms.  This includes an award of over $62 million dollars to a group of courageous whistleblowers who exposed significant corporate tax evasion.  It is the largest tax whistleblower award ever reported for a group whistleblower filing – and resulted in over $400 million dollars in taxes and interest recovered by the Treasury,” said Dean Zerbe of Zerbe, Miller, Fingeret and Frank (ZMF) law firm.

“The IRS has also recently provided a $26 million dollar award letter to our client who blew the whistle on secret bank accounts of billionaires – bringing back over $100 million dollars to the Treasury.  The amount of hidden dollars that have been brought to light thanks to the IRS whistleblower program makes it all the clearer that foreign countries – as well as our own states – that want to be serious about going after big-dollar secret stashes of cash need to implement a robust whistleblower award program.  Words and good intentions aren’t getting the job done – protecting whistleblowers, rewarding whistleblowers – that is what is needed to crack open the secret accounts.  The recent bipartisan amendment to the IRS whistleblower program by Senators Grassley (R-IA) and Wyden (D-OR) has been critical to ensuring that the whistleblower program is effective in going after illegal offshore accounts,” Kohn said.

“The whistleblowers have been through the wringer but have persevered to make sure the truth came out – often at great personal risk.  It is an honor – together with Steve Kohn – to represent these anonymous whistleblowers who have been recognized for the importance and value of the information they provided the IRS.  Honest taxpayers should especially be happy that thanks to these courageous whistleblowers – millionaires and billionaires are having to pay their fair share of the taxes they owe.  An enormous thanks to Senior Tax Analysts Felipe Castellanoz and Peggi Bochman as well as Director Lee Martin of the Whistleblower Office for their extraordinary time and effort in making these awards happen – and going the extra mile to cut through red tape.  Hats off in particular to the dedicated IRS employees at LB&I and CI who saw the value of the information provided by the whistleblowers,” said Dean Zerbe.

“It’s clear with this report announcing $312 million dollars in awards that the IRS has put out the red carpet for tax whistleblowers – and these recent awards of $88 million show that the IRS is not rolling up the red carpet anytime soon.  We have found in our work with whistleblowers that a successful whistleblower submission to the IRS will have good, solid facts – not speculation or theories.  The IRS is particularly interested in informed and knowledgeable insiders who have information and documentation about recent and ongoing tax fraud and tax evasion.  Whistleblowers with information about illegal offshore accounts, unreported income and corporate tax shelters will certainly get a hard look by the IRS,” said Kohn and Zerbe.

The modern IRS whistleblower award law (Section 7623(b) of the Internal Revenue Code) was created in 2006 and championed by Senator Charles E. Grassley (R-IA). The law provides that whistleblowers are mandated to receive 15-30% of proceeds collected by the U.S. government due to the information given by the whistleblower.  The IRS has also been extremely successful in protecting the confidentiality and anonymity of tax whistleblowers.

The below is a summary of what the IRS has collected over the last five years:

  Total Amounts of Awards Amounts Collected Awards as Percentage
of Amounts Collected
FY 2018 $312,207,590 $1,441,255,859 21.7%
FY 2017 $33,979,873 $190,583,750 17.8%
FY 2016 $61,390,910 $368,907,298 16.6%
FY 2015 $103,486,236 $501,317,481 20.6%
FY 2014 $52,281,628 $309,990,568 16.9%

Source, 2018: FY18 Annual Report to Congress
Source, 2017 – 2014: Rule 7: Get a Reward! Tax Cheats and the IRS qui tam

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