The IRS just released its annual report on the whistleblower program – showing over $616 million dollars brought into the Treasury thanks to the work of tax whistleblowers speaking out about tax evasion. While the awards to tax whistleblowers is not as high as last year’s record of collection of over $1.4 billion dollars and $312 million in awards – the awards for FY 2019 are still a solid $120 million (by comparison a marked improvement still over the $33.9 million in FY 2017 awards).

The trend is clear that the IRS has embraced the modern mandatory tax whistleblower program created by my old boss Chairman Charles Grassley (R-IA) – and it is honest taxpayers who have most benefited. Credit to the director of the IRS whistleblower office Lee Martin and his team for getting these awards out (as well as the support from IRS Commissioner Charles Rettig for the program).

The report makes note that the clarification in the law (26 U.S.C. 7623(c)) that whistleblowers can be paid for FBAR violations (undeclared foreign bank accounts) as well as criminal fines has been a key – with $110 million of the $616 million collected based on that clarification of the law. From my own practice representing tax whistleblowers, it is clear that the IRS continues to take a strong interest in receiving information from informed whistleblowers about offshore accounts and criminal tax activity.  Interesting, the report highlights for the first time that the IRS received 282 submissions from whistleblowers overseas last year. Being a foreign national is certainly not a bar to blowing the whistle to the IRS – and receiving an award.
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A guest post from Dean Zerbe, senior policy analyst for the National Whistleblower Center and former tax counsel for the Senate Finance Committee.

Many people considering blowing the whistle on tax evasion ask themselves the most basic question: Do I have a case that will interest the Internal Revenue Service (IRS)?

I have represented whistleblowers who have received over $300 million dollars in award payments from the IRS and during that time have found that there are a few key tests that may increase the possibility the IRS will take action on a whistleblower submission.

  • Federal Tax v. State Tax

The IRS whistleblower award program is focused on federal tax. If your case involves state taxes– then the answer is no. However, some states do have a whistleblower program that you may wish to explore filing with the appropriate state. Also, if the federal tax at issue is payroll tax, be cautious. These are highly fact intensive cases – and commonly the IRS will tell the taxpayer to simply “get right” going forward – with no back taxes owed (and therefore no award).

  • Know v. Speculation

The IRS whistleblower office has continually beaten the drums that they are looking for submissions from whistleblowers who have good, informed knowledge about tax evasion – as opposed to speculation. Speculation for the IRS means that the whistleblower doesn’t have first-hand knowledge, but may be familiar with the industry and believes or expects that there is evasion of tax. Particularly problematic submissions are those cases where the whistleblower cannot even name the specific taxpayer evading tax. While the IRS is open to a submission where the whistleblower doesn’t know every step of the transaction – the more the whistleblower can color it all in – the better.


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A guest post from Dean Zerbe, senior policy analyst for the National Whistleblower Center and former tax counsel for the Senate Finance Committee.

Tax whistleblowers had good news the other day with the Taxpayer First Act of 2019 (Public Law 116-25) being signed into law – including anti-retaliation protections for tax whistleblowers as well

The Swiss bank whistleblower who outed Americans’ secret USB bank accounts says he has information on more wrongdoing. Bradley Birkenfeld, who is described on his website as the “worlds most celebrated whistleblower,”  appeared at an offshore fraud and financial services conference in Miami in April. Birkenfeld was “treated like a celebrity,” reported journalist Brian Ross, who covered the event for Law & Crime Network, a legal website and streaming service.

The National Whistleblower Center supported Mr. Birkenfeld in his case, which involved a $20 billion tax evasion scheme.


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More whistleblowing in the halls of Congress and other news of the week. 

Rep. Elijah E. Cummings, chairman of the House Oversight Committee,  issued a statement this week in honor of the 30th anniversary of the Whistleblower Protection Act (WPA).

“We honor the contributions of the brave men and women who report wrongdoing despite great risks to their careers and personal lives as a result of retaliation.  Without the WPA, very few whistleblowers would be willing to come forward.  Congress relies on the WPA to fulfill its Constitutional duty to provide checks and balances on the Executive Branch—the very root of our democracy.”

He noted the role of whistleblowers in the Committee’s investigation into reports of White House efforts to transfer sensitive U.S. nuclear technology to Saudi Arabia.

The Atlantic reported last week that “small army of whistle-blowers from across the government has been working in secret with the House Oversight Committee to report alleged malfeasance inside the Trump administration. Lawmakers and aides are reluctant to discuss information they have gleaned from anonymous government tipsters in detail. But the list of whistle-blowers who either currently or previously worked in the Trump administration, or who worked closely with the administration, numbers in the ‘dozens’,” according to an aide to Cummings, a Maryland Democrat.

NPR also reported on the anniversary of the WPA.

ROBERT MACLEAN: Everybody in my neighborhood and my family thought I was insane and I was fighting a futile fight.

…That’s how it felt for Robert MacLean, a federal air marshal who, in 2003, told the public that the TSA canceled air marshal coverage on long-haul flights to cover budget shortfalls.


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Whistleblowers helped the IRS collect more than $1.4 billion in criminal fines, civil forfeitures, and reporting violations in fiscal year 2018, according to an agency report released Wednesday.

Of that record amount, more than $300 million went to IRS whistleblowers – an average of 21.7 percent of proceeds collected.That’s an increase from fiscal year 2017, when the average reward was 17 percent.

It was a record setting year in proceeds collected and award amounts paid, according to Lee D. Martin, director of the IRS Whistleblower Office. Since 2007, the program has made more than $800 million in whistleblower awards based on the collection of $5 billion.

In a written statement, Stephen M. Kohn, president of the National Whistleblower Center, called the report “the best news of the year for whistleblowers.” The IRS program is now working well, he wrote. “Whistleblowers who witness tax frauds will be encouraged to take the risk, and report the crimes. This is game changing.”


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Internal-Revenue-Service-buildingIn February 2018, Congress passed the Bipartisan Budget Act of 2018, requiring the Internal Revenue Service (IRS) to include penalties for Report of Foreign Bank and Financial Accounts (FBAR) violations in calculating whistleblower awards. Prior to this statutory change being signed into law, FBAR violations were not included in the calculation of IRS whistleblower awards.
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Alex-Sasha-Chepurko-whistleblower-interview
Whistleblower on CBS show

On Friday, August 31, CBS News will air a segment featuring biofuels fraud whistleblower, Alex “Sasha” Chepurko on the season finale of Whistleblower.  The episode, Case of “THE 100 Million Dollar Scam”, details Chepurko’s incredible story of blowing the whistle on a nationwide biofuels scam.
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IRS-Whistleblower-Building-Washington-DCToday, the U.S. Department of Justice officially dismissed their appeal of case Whistleblower 21276-13W and 21277-13W v. CIR, Case Nos. 17-1119 and 1120 (D.C. Cir.), marking a big win for IRS whistleblowers. Below is a statement from the whistleblowers’ attorneys.

The law firms of Zerbe, Miller, Fingeret, Frank & Jadav, PC (ZMF); Kohn, Kohn & Colapinto (KKC) and Robert Amsel, Esq. are pleased to announce today a key victory for tax whistleblowers with the filing of a joint stipulation for dismissal of the government’s appeal in the cases of Whistleblower 21276-13W and 21277-13W v. CIR, Case Nos. 17-1119 and 1120 (D.C. Cir.). The case was scheduled for oral argument on April 9, 2018 in the U.S. Court of Appeals for the District of Columbia Circuit.  It had pitted the U.S. Department of Justice and IRS against two whistleblowers whose information has led to $54.131 million in criminal penalties and civil forfeitures awarded against a major Swiss bank.  The DOJ and IRS were arguing that the tax whistleblower law did not apply to criminal tax cases that resulted in payments of fines and civil forfeitures.


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DOJ withdraws appeal in criminal tax whistleblower case; whistleblowers to obtain US$12.9 million award

WASHINGTON, D.C. | MARCH 29, 2018—The U.S. Court of Appeals for the District of Columbia Circuit today will dismiss an appeal filed by the U.S. Department of Justice (DOJ) and Internal Revenue Service (IRS) challenging the right of whistleblowers to obtain a financial reward based on disclosing information that results in the criminal prosecution of tax evaders. The case concerned a major international financial institution that was sanctioned for illegally assisting U.S. citizens in evading taxes. The IRS had initially denied an award to the two whistleblowers.  The whistleblowers challenged the denial in Tax Court and prevailed.  However, the DOJ and IRS challenged this finding in the Court of Appeals. Today, at the request of DOJ, that appeal will be dismissed, and the two whistleblowers will become the first persons to obtain an IRS whistleblower reward based on a criminal tax prosecution.


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