Whistleblower lawyers have long criticized the Internal Revenue Service (IRS) for the slow processing of tips regarding tax evasion. However, the recent $74 million payout to three whistleblowers, who provided information on an offshore tax-evasion scheme spanning 15 years, is seen as a sign of improvement. This scheme enabled the IRS to collect $263 million from an unnamed individual, highlighting the efficacy of whistleblowers in uncovering significant tax evasion cases.
Neil Getnick, managing partner at Getnick & Getnick LLP, which represented the lead whistleblower, described this victory as a potential harbinger for future success. The IRS declined to comment on this case, and the identities of the tipsters remain undisclosed. The IRS’s whistleblower program, initiated in 2007, has awarded roughly $1 billion to around 2,500 tipsters, leading to tax collections totaling $6 billion. The most noteworthy payout was the $104 million awarded to Bradley Birkenfeld, a former UBS Group AG banker, for exposing the bank’s assistance in helping Americans evade taxes.
The IRS’s Whistleblower Office, directed by John Hinman since 2022, has expanded its workforce from 48 to 84 employees, with a target of reaching 130. Hinman emphasizes improvements in the evaluation of tips and better collaboration with whistleblower attorneys. To expedite rewards, the IRS has introduced “disaggregation,” allowing partial early payments in cases initiated by whistleblowers. Hinman stated, “We’re continuing to collaborate with whistleblower practitioners.”
Attorney Dean Zerbe, who helped draft the whistleblower law and now represents whistleblowers, remarked that the program is advancing in the right direction despite initial growing pains. The recent payout is seen as evidence of these efforts paying off. The full article can be accessed here.