Did you know that in the past few years the IRS has created dozens of newly minted millionaires? The tax agency paid Bradley Birkenfeld 104-million dollars. Another example is Lynn Szymoniak, who walked away with 18-million dollars. In 2015, close to a hundred people walked away on average with more than a million-dollars apiece according to the IRS.
They all took part in the IRS’s Whistleblower program. The program was established to assist the IRS in building cases of fraud and tax avoidance against individuals and businesses. Thus far the agency has collected more than 500-million in added tax and penalties.
Although the numbers seem rather large, there are some important factors to keep in mind if attempting to part take in the program.
At our tax law offices in San Diego, Irvine in Orange County and Los Angeles, the tax law specialists of RJS LAW routinely review potential whistleblower claims. There are some important facts to keep in mind.
In 2015, more than 12-thousand claims were filed with the IRS and only a small percentage of those claims actually moved forward. The majority are pending and may never be acted upon.
Pursuant to the code, in order to be considered the following conditions must be met.
- Whistleblower Claims must be signed and submitted under penalties of perjury.
- The claim must relate to a tax noncompliance matter in which the tax, penalties, interest, additions to tax, and additional amounts in dispute exceed $2,000,000
- It must relate to a taxpayer, and for individual taxpayers only, one whose gross income exceeds $200,000 for at least one of the tax years in question.
The most successful claims typically involve tens of millions of dollars. These cases are usually assisted by a legal team with a profound understanding of tax law, policies and procedures, like the tax law experts at RJS LAW.
The IRS is interested in cases where research has been done on the claim and it is well supported with relevant documentation and exhibits. The IRS Whistleblower Department has a limited staff of 60 to sort through the thousands of claims it receives every year. Due to the limitations, the agency has to prioritize its workload, typically by focusing on the cases easiest to pursue and with the largest collection potential.
Additionally, whistleblowers should not expect a quick decision or payout. The IRS distributes the award from collected proceeds, and as such, payments are not made until the taxpayer has exhausted all appeal rights and the statutory period for the filing of a claim for refund has expired. Therefore, the IRS does not make payments for usually five to seven years after the whistleblower has filed a claim.
Finally, whistleblowers may find themselves the target of investigators. As part of its research into a claim, the IRS routinely looks into the motivations of people bringing the action and whether they’re hiding any relevant information or documentation. While Bradley Birkenfeld received a 104-million dollar settlement, he also went to jail for 2 and 1/2 years for illegally assisting clients stockpile funds overseas.
If you believe that you have a Whistleblower claim, the tax experts at RJS LAW can confidentially help you evaluate your options. We’ll sit down with you, review the evidence you have and help you determine a course of action. With offices in San Diego, El Cajon and Irvine in Orange County we offer convenient access. Contact or call us today at (619)-595-1655 today to schedule a no-obligation appointment.
This blog post is not intended as legal advice and should be considered general information only. If you have tax or business related questions or if you have received any types of notices from either the IRS or the California Franchise Tax board, contact the tax professionals at RJS LAW today.
Our team constantly stays updated on the latest tax issues and we can help you sort through your options. We have convenient offices in Los Angeles, Orange County and San Diego and we can help. For a free consultation call us at (619)-595-1655.
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