Two whistleblowers yield $17.8 Million in tax evasion case

In a ruling that expands the rights of whistleblowers  two whistleblowers were allowed to obtain a portion of criminal fines and civil forfeitures in addition to their part of the taxes the government has recouped says the U.S. Tax Court.  The case involved a Swiss bank which pleaded guilty in 2013 to conspiring with U.S. taxpayers to hide moneys from the IRS. The amounts were $74.1 million in fines, taxes and forfeitures.

Prior to this decision, whistleblowers had to be concerned that they would receive less of the proceeds if the IRS chose to pursue a criminal case than if the case was based purely to collect taxes owed.  The Judge in his decision focused on the term”collected proceeds” which refers to the amount used to calculate the award.

Under the IRS whistleblower program anyone who has knowledge of tax violations can file confidential claims with the IRS and be awarded as much as 30% of what the government collects. In 2015, the IRS paid 99 awards totalling $103.5 million.

Jeffrey Newman represents whistleblowers