A whistleblower is anyone who reports the immoral, fraudulent, or otherwise harmful activity of an individual or organization. There are many provisions and laws set up on both a federal and state level to protect and encourage whistleblowers.
One of the most central whistleblower protection laws is the False Claims Act, which was also the first law of its kind. The FCA protects anyone who “blows the whistle” on actions that financially damage the US government, usually through fraud. It does this in part through a provision allowing for qui tam suits, or suits filed by individuals or NGOs on behalf of the US government. In addition to protecting these whistleblowers, the FCA mandates that if their information led to a successful prosecution, they will be given a portion of 15%-30% of the proceeds of the suit. Considering that this includes all civil suits in addition to criminal suits, and these cases often carry treble damages, this percentage could represent a sizable sum of money.
The IRS has a version of the False Claims Act, usually referred to as the IRS Whistleblower Program.
The IRS Whistleblower Program was instituted to help cut down on wealthy people and businesses skirting their tax obligations. Often, the very wealthiest people and companies will try to cut costs by reducing their tax liability. While there are legal ways to do this, illegal tax evasion is also commonly employed. The IRS Whistleblower Program allows individuals to report significant tax underpayments or evasions. This includes, but is not limited to:
Yes. If the information you give to the IRS results in successful prosecution and/or financial recovery, you are entitled to an award of at least 15% and up to 30% of the recovery. The actual percentage you may receive beyond the requisite 15% is at the discretion of the IRS. Generally, though, the bigger your contribution, the more they are likely to give you.
However, in order to receive this award, you must qualify for the program.
In order to qualify for this program and the right to your award, the case must meet certain conditions.
Your best course of action is to consult with or hire a whistleblower attorney as soon as you think you have a viable case. This attorney will protect your interests and safety, ensure that your case is filed according to all rules and standards, help you make a sound, convincing argument, and argue for your reward.
Once you have contacted an attorney, you will gather evidence and build your case. An attorney can help you craft a narrative backed up by as much evidence as possible about what happened. The more documentation you can provide, the likelier the IRS is to actually pursue and prosecute the case.
Once you have built your case up sufficiently, you and your attorney submit the relevant information to the IRS Whistleblower Office using a specific form (IRS Form 211). If the IRS is interested, the case will then proceed from there.
While it is generally considered a worthwhile and good thing to do to rectify tax fraud, you should realistically understand that there are risks involved. While the IRS will protect your identity, there are some circumstances in which it may be revealed (including if there is ever a criminal proceeding that results from your report.) In addition, though you do have some legal protections against retribution, you may become the subject of various types of attack from the person you reported on. An experienced whistleblower attorney can fully explain the potential risks involved in your case, and advise you about whether or not you should proceed.
Do you think you have that might qualify for the IRS Whistleblower Program? Call (504) 332-8188 for a free consultation today.