To combat tax fraud and evasion, the U.S. Government created the Internal Revenue Service (IRS) whistleblower program. This program provides rewards and protections to those who expose unlawful activities. The IRS estimates that every year $450 billion dollars is underpaid in taxesby companies and individuals, which unfairly shifts the burden of federal funding onto ordinary citizens. In 2006 Congress passed the Tax Relief and Healthcare Act that was modeled after the successful False Claims Act. To date, the IRS Whistleblower Office has paid over $315 million in awards to the brave relators who helped the authorities recover illegally hidden funds.

Protection and Anonymity

People who want to blow the whistle can submit their information by hiring an attorney to represent them. Together, they will work with their attorney to organize a claim by completing IRS Form 211, attaching any relevant documents in their possession, and then sending the form to the IRS Whistleblower Office. Over the course of the investigation, the whistleblower’s identity will remain protected since the authorities will not reveal any identifying information such as their name, age, gender, or job position, except under very limited circumstances.

IRS Whistleblower Reward Provision

If the taxes, interests, and penalties exceed $2 million, the whistleblower is entitled to a payment of 15-30% of the amount collected by the IRS. The information provided by whistleblowers must be confidential, meaning that it is not commonly accessible or available in public records. Another factor that increases the amount of reward provided is how long it took the plaintiff to approach the government about the alleged illegal scheme. Also, more detailed submissions to the IRS that contain thorough legal and technical analysis of taxpayer records may help to secure a larger award.

The invaluable help provided by whistleblowers

To date, the IRS Whistleblower Office has awarded over $1 billion to whistleblowers, over $86 million of which have been paid in fiscal year 2020 alone. Every year the government recovers hundreds of billions in uncollected corporate taxes thanks to the help of anonymous tips. Usually, most of the information about the companies involved cannot be disclosed to protect the relator’s identity. In September 2012, however, Bradley Birkenfeld has been awarded $104 million for his role in exposing how UBS helped its clients conceal money in Swiss tax shelters.

How to report fraud under the IRS Whistleblower Program

Any individual who discovers tax fraud may file a case with the IRS. Whistleblowers do not have to be citizens and do not have to be employees of the company they are reporting. Cases must be submitted as early as possible due to the statute of limitations, which can be as short as three years. If you or someone you know possess valuable information on a company or individual cheating on their taxes, you should contact a whistleblower attorney immediately.

Submissions must be accompanied by evidence including financial data, a description of the company’s assets, copies of books and records, transaction documents, the location of bank accounts, or even the personal addresses and employment history of the persons involved in the alleged scheme.

Take the First Step

If you are unsure whether you have a whistleblower case, you should still contact an attorney as soon as possible because Statute of Limitations laws may prevent you from filing a case if too much time has passed. Your first consultation is free and totally confidential. Call us now at , or file a form by clicking the button below.

The idea of becoming a whistleblower can be scary, especially if you’re an insider who works for the company you want to report. Fear of retaliation is common in potential whistleblowers. Luckily, the CFTC has ways to protect good Samaritans who want to do the right thing. 

ANONYMITY 

The first line of protection is anonymity. If a whistleblower is represented by an attorney when submitting a TCR, their identity can remain a secret. If the whistleblower becomes eligible for an award, they must reveal their identity to the Commission. Even then, the CFTC does not disclose the identity of the whistleblower or what amount was awarded to them. However, this protection is not absolute.

EXCEPTIONS TO ANONYMITY 

There are a few circumstances under which the CFTC might release the whistleblower’s identity to the defendant or third parties. It might happen if the whistleblower consents to have their identity revealed. It’s also possible that disclosure might be required in connection to a public proceeding with a different government entity. The Commission only discloses this information in situations where it is necessary to accomplish the purposes of the Commodities Exchange Act.

THE ANTI-RETALIATION CLAUSE 

Even if the whistleblower’s identity is revealed, there is still a second line of protection: the anti-retaliation clause. Employers are prohibited from firing, demoting, harassing, suspending, or discriminating against a whistleblower who has reported a violation. Employers are not even allowed to restrict the communication a potential whistleblower has with the CFTC, including enforcing a confidentiality agreement or an arbitration clause in the employment contract. 

The Dodd-Frank Act prohibits retaliation by employers against whistleblowers. Employers may not take any action to impede would-be whistleblowers from communicating directly with the Commission’s staff about possible violations of the Commodity Exchange Act (CEA), including by enforcing, or threatening to enforce, a confidentiality agreement or predispute arbitration agreement with respect to such communications. Nor may employers discharge, demote, suspend, threaten, harass, directly or indirectly, or in any other manner discriminate against a whistleblower in the terms and conditions of employment for coming forward with information about possible violations of the CEA. The CFTC and the whistleblower may separately bring actions against an employer for retaliation against the whistleblower.