IRS Pays Whistleblower $104 Million for Exposing Tax Cheats

The Internal Revenue Service has awarded former banker Bradley Birkenfeld $104 million.

By STEPHEN OHLEMACHER

WASHINGTON (AP) - The Internal Revenue Service has awarded an ex-banker $104 million for providing information about overseas tax cheats - the largest amount ever awarded by the agency, lawyers for the whistleblower announced Tuesday.

Former Swiss banker Bradley Birkenfeld is credited with exposing widespread tax evasion at Swiss bank UBS AG (UBS). Birkenfeld himself served roughly two and-a-half years in prison for a fraud conspiracy conviction related to the case, which resulted in a $780 million fine against the bank and an unprecedented agreement requiring UBS to turn over thousands of names of suspected American tax dodgers to the IRS.

"The IRS today sent 104 million messages to whistleblowers around the world - that there is now a safe and secure way to report tax fraud and that the IRS is now paying awards," Birkenfeld's lawyers, Stephen M. Kohn and Dean A. Zerbe, said in a statement. "The IRS also sent 104 million messages to banks around the world - stop enabling tax cheats or you will get caught."

The IRS, which doesn't usually confirm individual award payments, said Birkenfeld signed a disclosure waiver, allowing the agency to confirm his award.

"The IRS believes that the whistleblower statute provides a valuable tool to combat tax non-compliance, and this award reflects our commitment to the law," IRS spokeswoman Michele Eldridge said in an email.

Birkenfeld has become something of a cause celebre among whistleblowers because of the magnitude of his case and the fact that he was jailed after cooperating with authorities.

In a summary of the award provided by Birkenfeld's lawyers, the IRS said, "The comprehensive information provided by the whistleblower was exceptional in both its breadth and depth."

"While the IRS was aware of tax compliance issues related to secret bank accounts in Switzerland and elsewhere, the information provided by the whistleblower formed the basis for unprecedented actions against UBS AG, with collateral impact on other enforcement activities and a continuing impact on future compliance by UBS AG," the IRS said in the summary.

Federal prosecutors, however, had said Birkenfeld withheld information about his own dealings with a former UBS client who pleaded guilty in 2007 to tax charges.

In 2006, Congress strengthened whistleblower rewards. The 2006 law targets high-income tax dodgers, guaranteeing rewards for qualified whistleblowers if the company in question owes a least $2 million in unpaid taxes, interest and penalties.

Some lawmakers, however, have complained that the IRS has been slow to pay out awards.

"The potential for this program is tremendous, and it's up to the IRS to continue paying rewards and demonstrating to whistleblowers that the process will work and that they will be heard and protected," said Sen. Chuck Grassley, R-Iowa, who helped write the law. "An award of $104 million is obviously a great deal of money, but billions of dollars in taxes owed will be collected that otherwise would not have been paid, as a result of the whistleblower information."



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DogEat_WORLD

Romney has done just as much if not motre tax cheating than any other multi Millionaire who uses Swiss Bank Accounts.

Why else would he not show more than 1 or 2 years of Tax returns, unless he had something very damaging to hide? Obama has shown all of his Tax returns? Nothing to hide!

September 16 2012 at 7:59 PM Report abuse rate up rate down Reply
clembarry

The "Whistle Blower Law" is Alive. Be careful what you are discussing with you close friends, family members and spouse. Don't trust anybody. They may stabbed you in back later and cost you a small fortune in back taxes, interest and penalties plus time in prison. "A word to the wise is god enough!"

September 12 2012 at 7:57 PM Report abuse -1 rate up rate down Reply
bigmike

USA 'what a screwed country of cheats, swindlers, trigger happy cops, over zealous military, guns and violence, poor schools, horrific medical services, over priced everything and now we've added punks and snitches to our cost of living...shesh...someone kill me now.

September 12 2012 at 4:24 PM Report abuse -1 rate up rate down Reply
Your Momma

Snitches get Stiches. Watch your back Champ. Your name and face are out there now.

September 12 2012 at 12:17 PM Report abuse -1 rate up rate down Reply
mamboq7

what about BoA and Wells Fargo?

September 12 2012 at 10:41 AM Report abuse rate up rate down Reply
jonytiler

It is a disgrace that this government is paying people to turn in other people to the government. What is happening to America?

September 12 2012 at 10:29 AM Report abuse rate up rate down Reply
jay.gold

Yes, he was part of the problem and jailed for it. However, without his help the IRS could not get the tax
cheaters. But paying him 107Mil ? How about 1-2 Mil and the rest put to use to create jobs ?

September 12 2012 at 9:51 AM Report abuse +1 rate up rate down Reply
jay.gold

Yes, he was part of the problem and jailed for it. However, without his help the IRS could not get the tax
cheaters. But paying him 107Mil ? How about 1-2 Mil and the rest put to use to create jobs ?

September 12 2012 at 9:50 AM Report abuse -1 rate up rate down Reply
lance

does anybody else notice that he not even a US citizen but is geting tax payers money for snitching what the hell is going on

September 12 2012 at 9:41 AM Report abuse rate up rate down Reply
boodiemama

so, as i understand the article, this guy was a willing participant in the fraud..........until caught.........now he sings and gets paid for it...........doesn't sound right to me

September 12 2012 at 9:20 AM Report abuse rate up rate down Reply