Whistleblower Awarded $104 million by IRS
Just this past year Bradley C. Birkenfeld, a former banker for UBS, completed his two and a half years in prison for conspiring with a wealthy California developer. They tried to cheat their United States taxes and got caught.
The Internal Revenue Service (IRS) has acknowledged that the information Birkenfeld provided was very helpful. Birkenfeld has been awarded $104 million for whistleblowing and revealing the secrets of the Swiss banking system. With the revelation of these secrets, the IRS has uncovered more than 4,500 American clients the UBS had. In addition, the bank paid $780 million in 2009 to avoid criminal prosecution. Yet, this program of rewarding whistleblowers hasn’t always been applauded and still has its group of people that don’t agree with it.
There was also a lot of buzz that said if they discontinued giving whistleblowers a reward, it would scare off other potential informants. Despite all that, the law strengthened in 2006, and there have been hundreds of claims alleging tens of billions of dollars in tax evasion.
Michelle Eldridge, spokeswoman for the tax department, said the whistleblower statute is a very valuable tool to fight noncompliance.
Senator Charles E. Grassley, of Iowa, who helped write the whistleblower law says the award is an important step and urged the IRS to issue these awards in a timely manner to continue receiving the help of those whistleblowers and keep the law breaking to a minimum.
