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Whistleblower Rewards

Kohn, Kohn & Colapinto represented the world’s largest Internal Revenue Service (IRS) Tax Fraud Whistleblower, Bradley Birkenfeld.

Mr. Birkenfeld disclosed illegal offshore Swiss banking that resulted in over $5 billion recovered for U.S. taxpayers. His information forced Switzerland to change its international treaty with the United States and Switzerland’s largest bank was forced to turn over the names of over 4,900 U.S. citizens who held illegal offshore accounts. Mr. Birkenfeld received a $104 million IRS Whistleblower reward – the largest ever received by an individual whistleblower.

As the Fox News special program “Tracking Your Taxes” reports, the IRS has launched a major offensive against tax evaders. There has been extensive media coverage of whistleblowers fighting tax fraud, including the CNBC story “Bounty Hunters” and a 60 Minutes special report.

In addition to representing tax whistleblowers, Kohn, Kohn & Colapinto’s partners have been in the forefront of seeking to enhance the legal protections for tax whistleblowers, and filing rulemaking petitions to the IRS to strengthen the tax whistleblower program.

Whistleblowers that provide information about tax fraud or tax underpayments to the IRS can receive rewards. The whistleblower must provide information that is specific and credible. If the IRS uses information provided by a whistleblower, it can award that person up to 30 percent of the tax, penalties and interest it collects.

Federal law provides for two types of awards. Internal Revenue Code (IRC) Section 7623(b) provides for awards of 15 to 30 percent of the amount collected if the taxes, penalties, interest and other amounts in dispute exceed $2 million, and if the case deals with an individual, his or her annual gross income must be more than $200,000. IRC Section 7623(a) provides for a maximum award of 15% for those cases that do not meet the dollar thresholds of $2 million in dispute or cases involving individual taxpayers with gross income of less than $200,000.

Read Stephen Kohn and Dean Zerbe’s paper on proposed IRS rules here.

If you have knowledge of Tax Fraud and would like to know how Kohn, Kohn & Colapinto can help you with your case, please contact us.

For more information, see our resource page on Whistleblower Protections and Rewards under the Internal Revenue Code or visit the Kohn, Kohn & Colapinto Blog.