IRS Loses $1 Trillion Every Year To Tax Cheats
Individual Whistleblowers Rewarded When IRS Recovers
Protection From Employer Retaliation
Charles Rettig, Commission of the Internal Revenue Service (IRS), reported this Spring that the United States is losing approximately $ 1 trillion in unpaid taxes every year. This so-called “tax gap” has surged in the last decade with most of the unpaid taxes the result of tax evasion by the wealthy and large corporations, according to Commissioner Rettig. The Commissioner was testifying before the Senate Finance Committee when he made his remarks, arguing that the agency lacks the resources to catch tax cheats. That is where private citizens can help. The IRS Whistleblower Office pays money to people who blow the whistle on corporations who fail to pay the tax that they owe. The Whistleblower Office encourages individuals with specific and credible information about tax noncompliance to provide this information to the Government, and rewards them for their efforts when the IRS recovers. Fiscal year 2020 marked the 14th anniversary of the Whistleblower Office and the Whistleblower Program. Statistically in FY 2020, the Whistleblower Office made 169 awards to whistleblowers totaling $86,619,032 bringing the grand total awarded since the office was created to more than $1 billion and a successful collection of $6.14 billion from non-compliant taxpayers. Evans Law Firm, Inc. can help you submit information of tax fraud to the government and present your evidence with a goal toward a reward if the IRS recovers. If you have credible information of tax fraud, call us today at (415)441-8669. Our toll-free number is 1-888-50EVANS (888-503-8267).
Eligibility for Whistleblower Awards
The IRS provides two types of awards. If the taxes, penalties, interest and other amounts in dispute exceed $2 million, and a few other qualifications are met, the IRS will pay 15 percent to 30 percent of the amount collected. If the case deals with an individual, his or her annual gross income must be more than $200,000. If the whistleblower disagrees with the outcome of the claim, he or she can appeal to the Tax Court. These rules are found at Internal Revenue Code IRC Section 7623(b) – Whistleblower Rules.
The IRS also has an award program for other whistleblowers – generally those who do not meet the dollar thresholds of $2 million in dispute or cases involving individual taxpayers with gross income of less than $200,000. The awards through this program are less, with a maximum award of 15 percent up to $10 million. In addition, the awards are discretionary and the informant cannot dispute the outcome of the claim in Tax Court. The rules for these cases are found at Internal Revenue Code IRC Section 7623(a) – Informant Claims Program, and some of the rules are different from those that apply to cases involving more than $2 million.
Off-Shore Tax Avoidance
One of the largest forms of tax evasion – and one targeted most of all by IRS enforcement measures – is tax avoidance through use of offshore companies (to hide revenue) and offshore bank accounts (hiding income). These schemes also often violate other federal laws, including banking law. See, e.g., Reports of Foreign Bank and Financial Accounts Act (FBAR) (31 U.S.C. § 5314); Foreign Account Tax Compliance Act (FATCA) (26 U.S.C. § 1471 et seq.). Other forms of tax evasion include under-reporting of income, overstatement of deductions, failure to withhold taxes, failure to pay employment taxes, and failure to file. Many of the individuals with information of tax fraud of any variety are employees who discover their employer’s tax evasion maneuvers while on the job. Those employees are protected from retaliation by their employers which can include demotion, re-assignment, suspension, or termination. See 26 U.S.C. § 7623. Evans Law Firm, Inc. can represent you in any suit for employer retaliation in addition to representing them before the IRS with their whistleblower claim. Remedies for wrongful retaliation by an employer include reinstatement, double back pay, interest, and attorneys’ fees and costs for bringing your lawsuit. See 26 U.S.C. § 7623.
Ingrid M. Evans represents individuals with credible, original information of any kind of tax fraud, including offshore tax avoidance measures, use of foreign corporations and accounts to avoid taxation or the like. Ingrid can be reached at (415) 441-8669, or by email at <a href=”mailto:firstname.lastname@example.org”>email@example.com</a>. Our toll-free number is 1-888-50EVANS (888-503-8267).
Evans Law Firm, Inc. also handles whistleblower actions under the Financial Reform, Recovery, and Enforcement Act (FIRREA/FIAFEA), the Commodities Futures Trading Commission Whistleblower Program, the Securities and Exchange Commission Whistleblower Program, False Claims Act cases, the FINRA Whistleblower Office and the California False Claims Act.