The IRS recently released a report showing that they paid out a record $125 million to whistleblowers in 2012. The IRS whistleblower program is designed to reward those who report tax evasion or fraud with financial compensation.
In 2006, Congress overhauled the whistleblower program among criticism that it was ineffective. Some argued that the program moved too slowly and didn’t have the resources to provide whistleblowers enough incentive to report misconduct. The overhaul appears to have worked: new whistleblower submissions peaked at 472 in 2009, with 332 in 2012. Last year the IRS collected.
The bulk of this year’s total was paid out to a single whistleblower. A former employee of the Swiss bank UBS AG was awarded $104 million. He had earlier helped wealthy Americans hide millions of dollars in offshore accounts, a form of tax evasion that has seen increased enforcement activity in recent years. He later told the IRS about that activity.
The IRS can be a formidable adversary if they suspect you of tax cheating or fraud. Enforcement actions can range from an audit – which can seemingly take over your life – to fines and penalties to time spent in prison.
If you have concerns about your taxes or have been contacted by the IRS about an audit or other enforcement action, do not hesitate to act. It may be wise to consult an experienced tax law attorney who can keep you advised of your rights and responsibilities while protecting your personal and financial interests.
Source: Reuters, “IRS paid record $125 million to whistleblowers in 2012: report,” Nanette Byrns, Feb. 13, 2013