Articles Posted in corporate tax evasion

The Vanguard Group one of the world’s largest investment funds with $3 trillion under management illegally evaded taxes through transfer pricing, says whistleblower David Danon, a tax attorney at Vanguard for nearly five years.  He became aware of a transfer pricing arrangement while at Vanguard and its affect on corporate taxes. He filed a whistleblower action in 2013 under the New York False Claims Act. He alleges that Vanguard charges its own funds at cost prices for management services, which is below market pricing. Vanguard says that the Securities and Exchange Commission issued an order approving :joint participation arrangement. Danon says that order allowed the transactions for securities purposes not taxes. Continue reading

Although much has been written about the IRS whistleblower program which last year saw a whistleblower collect $104 million in rewards for reporting tax evaders, not much has been mentioned about whistleblowers who report companies that purposely do not pay their sales taxes. Most states have sales taxes on goods sold or exchanged in those states. The amount varies from 5-7% but companies selling products are required to pay sales taxes in those states with such laws and where the transaction occurs in those states. Even though the laws are clear, alot of companies, especially those in offices in various states, try to evade the taxes by just not paying them. In addition, even in those states that do not have actual whistleblower laws on the books, whistleblowers with information about sales tax fraud can usually negotiate a reward of a significant percentage of the moneys recovered by the states. It usually ranges from 15-35% of the moneys collected. It helps to have an experienced lawyer. The information has to be original and generally the amounts of sales tax fraud must be substantial for the states to be interested. It also helps to have documentary support for your allegations in the form of invoices or other documents showing the sales. There have been some very large cases. In one case pending in New York State, Sprint has been charged with seeking to dodge over $300 million in sales taxes. With interest and penalties, that amount could run the company in excess of $700 million and the whistleblower could receive up to $200 million, which would be the single largest whistleblower award relating to tax fraud ever rendered. If you are aware of corporate tax fraud, contact attorney Jeffrey Newman for a free consultation. Jeffrey Newman represents whistleblowers. Jeffrey.Newman1@gmail.com

The IRS and Securities and Exchange Commission are finding unusual sources of information–international financial whistleblowers who are revealing enormous amounts of sensitive information about banks and large corporations that are evading taxes and defrauding investors and stock holders. The new breed of whistleblowers are sophisticated enough to know that they can reveal information under the SEC or IRS whistleblower programs and still remain anonymous, a new twist to these whistleblower programs expected to make all the difference to these individuals. It allows them to continue working without the fear of reprisals. It also allows them to collect the rewards of up to 30% of what the government recovers and in many of these cases, especially with regard to bank insiders in Switzerland, the Isle of Man, Cayman Islands as well as other major tax havens in the Caribbean, the fraud is massive. The Government Accounting Office estimates that trillions of dollars in taxes are lost to foreign tax havens which allow individuals and corporations to illegally secrete their moneys from Uncle Same because they money is kept outside the U.S. . Up until now, that has worked, for the most part. But as there is a significant incentive for whistleblowers to reveal this fraud,the jog may be up. One whistleblower was awarded $104 million last year as his share of the recovered moneys. That award generated significant press and since then, calls have come from the whistleblowers. If you are aware of financial fraud, tax evasion or fraudulent financial statements filed by publicly traded companies, contact Jeffrey Newman who represents whistleblowers. Jeffrey.Newman1@gmail.com. 1-800-682-7157. free consultations.

When you start with knowledge that every dollar of tax evasion is borne on the backs of the rest of the United States citizens, the issue of tax evasion becomes more prominent. As time passes and budget belts tighten perhaps then the IRS will awaken to the need to energize its whistleblower program to collect what is really owed by US companies. John Mackey, co-founder and co-CEO of Whole Foods Market has a different spin on things. He says we should not blame Apple because it seeks to avoid paying taxes. “They are just following the rules.” That may be one way to put it. Another is that Apple and General Electric and scores of other multi-national companies have taken a very narrow perspective on the definition of good citizenship. As consumers, we hold the cards. If we gather together and say in unison, by our buying power: “Apple, when you decide to pay your fair share of taxes like we do, we will buy your products,” that would make a difference. Nothing like a truly capitalist Democracy, with a capital D. In his interview with the Financial Times, Mackey distinguished between Apple and General Electric. He says GE gets tax breaks because of crony capitalistic favors from the government in the form of tax credits because they are investing in alternative energy. None of this relates to some of the larger forms of tax fraud such as transfer pricing and the use of tax havens to evade US taxes. Those efforts are shameful, as are the meager efforts of the IRS to pursue them. Whistleblowers even the playing field and when they come forward with primary data which cannot be ignored, the IRS has no choice. Jeffrey Newman represents whistleblowers. jeffrey.newman1@gmail.com

A few weeks ago, US prosecutors closed down currency operator Liberty Reserve for running one of the largest money laundering schemes ever uncovered, according to prosecutors. Virtual currencies are systems to allow anonymously transferred funds to be used as currency on the internet. What is it you ask? It is electronic money used for transactions with real goods and services and because they exist entirely within a virtual setting it is hard to tax the transactons.  For example Bitcoin users can use the virtual currency to engage in real economic activity but as they are anonymous, they can evade taxes.Digital currency is electronic money that can be passed between individuals without the use of the traditional banking or money transfer system. Bitcoin, which has been embraced by a number of venture capitalists in Silicon Valley, exists through an open-source software program that any users with enough skill and computing power can access. It is not managed by a single company or government. Users can buy bitcoins through exchanges that convert real money into the virtual currency. The problem is that the unscrupulous have also found virtual currency and are using it to launder money and evade taxes within the US. The Government Accountability Office (GAO) has stated that the IRS must to more to investigate tax evasion using virtual money on line. Virtual money has now been deemed cyber-currency and it has resulted in misuse to hide unreported income from the IRS. Whistleblowers with unique or inside information about tax evasion through use of cyber funds can report this and may receive up to 30% of what the government recovers. Jeffrey Newman represents whistleblowers. jeffrey.newman1@gmail.com

The U.S. economy is slowly pulling up from the system shock it took in 2008 around the mortgage backed securities and real estate scandal. The avarice which was at the basis of that disaster is not dissimilar from the corporate greed seen in what is known as transfer pricing or offshore tax havens. In transfer pricing, companies say on paper how their products are produced in the US and elsewhere and then shift the major tax burden to the country with the lowest corporate taxes–Ireland and Switzerland. Some of the tax loopholes are legal and must be closed but an awful lot of what is going on is rabid tax evasion and clearly in violation of law. Here, the IRS really needs the insider whistleblowers to know how the schemes are set up and where to find the evidence. The reason is that even when companies are public, the flow of cash is very difficult to trace. Why should people come forward to reveal the wrongdoing? Well one reason is that when tax evasion happens, the rest of us bear the burden as we must sustain the economy with fewer dollars. Another reason has to do with national loyalty. If a company develops and earns significant sums of moneys here, it should be willing to pay its fair share of taxes and not to seek to evade them. As we pull up from near disaster, let’s not allow our massive companies to earn the highest yields in decades and pay the lowest corporate taxes in 16 years. If you know of tax fraud, come forward and reveal it. The IRS whistleblower program allows you to render the information anonymously. Jeffrey Newman represents whistleblowers. jeffrey.newman1@gmail.com