IRS whistleblowers had a great year
Wednesday, February 27, 2013 at 7:31AM
Richard L. Cassin in Bradley Birkenfeld, IInternal Revenue Service, Whistleblower

The U.S. Internal Revenue Service paid whistleblowers  a record $125 million in 2012, according to the agency's annual report to Congress.

The biggest payment by far -- $104 million -- went to former jailed UBS banker Bradley Birkenfeld.

Before last year, 2008 saw the biggest payouts, with 198 whistleblowers awarded a total of $22 million.

Last year the IRS paid 128 awards.

Birkenfeld collected his bounty in August last year, weeks after completing his 31-month prison sentence. As a private banker, he helped people cheat the U.S. government out of taxes.

The IRS pays 15 to 30 percent of amounts collected based on the information provided by a whistleblower.

More than $592 million in back-taxes were collected in 2012 through whistleblower tips.

The IRS said it received 332 whistleblower submissions identifying 671 taxpayers during the year that were eligible for awards. Some pending submissions may still result in payments.

Most qualifying whistleblowers 'claimed to have inside knowledge of the reported transactions, often including extensive documentation in support of their claims,' the IRS said.

To qualify for an award, the information must relate to a tax dispute of at least $2 million, including the tax, penalties, and interest.

And for tips about individuals, the allegations have to 'relate to a taxpayer whose gross income exceeds $200,000 for at least one of the tax years in question.'

Twelve of the 128 claims paid in 2012 involved collections of more than $2,000,000, the IRS said.

The IRS generally won't confirm whistleblower payments due to privacy rules.

Birkenfeld signed a limited privacy waiver when he received his $104 million payment, the IRS said.

The IRS whistleblower office has a staff of 36 analysts, administrators, lawyers, and managers.

The Internal Revenue Service's whistleblower site is here.

Article originally appeared on The FCPA Blog (http://www.fcpablog.com/).
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