IRS Whistleblower Tax Fraud Lawyer
American taxpayers are losing $1 trillion annually due mostly to tax evasion by wealthy individuals and large corporations. Meanwhile, honest taxpayers with fewer resources are footing the bill.Â
The IRS lacks the resources necessary to capture these tax cheats and thus offers compensation to whistleblowers who provide information to help recover these funds. If you have witnessed illegal tax evasion, the whistleblower attorneys at Cutter Law P.C. can help you gather the necessary evidence and ensure your case is filed correctly.
Quick Links
- What is a whistleblower?
- What is the IRS Whistleblower Law?
- What types of tax errors can be reported under the IRS Whistleblower Law?
- How to file an IRS Whistleblower Claim
- Is my award taxable?
- Can I appeal?
- How long does it take to receive compensation?
- How much time do I have to file a whistleblower claim?
- How can a whistleblower lawyer help me?
- Why should I choose Cutter Law P.C.?
What is a whistleblower?
A whistleblower is an individual, usually but not always an employee, who reports waste, fraud, and abuse to the appropriate governmental agency. IRS whistleblowers report underpayment of taxes to the IRS.
What is the IRS Whistleblower Law?
Title 26 U.S. Code § 7623 provides IRS whistleblowers with financial compensation and civil protection against retaliation.Â
Awards
Under § 7623(b) of the IRS Whistleblower law, the IRS provides awards to whistleblowers of 15 to 30 percent of the proceeds recovered when the case meets the following criteria:
- The taxpayer in question has a gross annual income of at least $200,000
- Recoverable proceeds net at least $2 million, including penalties and interest.
Cases that do not meet the above criteria may still qualify for compensation under § 7623(a) of up to 15 percent of the recovered proceeds, including interest and penalties, at the discretion of the IRS.
Awards can be reduced to 10 percent or lower, or in some cases, denied, in the following circumstances:
- The information was obtained from a public source, such as a judicial hearing, investigation, or the news media
- The tax fraud was planned or initiated by the individual filing the claim
- The individual is convicted of criminal conduct in relation to the claim
Retaliation Protection
Title 26 § 7623 also provides civil remedies for employees who report employers under the IRS Whistleblower Law. Retaliation by an employer includes but is not limited to the following:
- Termination
- Demotion
- Suspension
- Threats
- Harassment
Employees who experience retaliation can file a complaint with the Secretary of Labor and, if there is no action within 180 days, in district court.Â
The IRS holds the identity of whistleblowers in strict confidence. However, in the event your testimony is required, your identity may become known.
What types of tax errors can be reported under the IRS Whistleblower Law?
Any underpayment of tax may be reported, whether the underpayment was due to fraud or an innocent error. Substantial underpayments are often the result of fraud. Examples of tax fraud include the following:
- False deductions
- False documents
- Failure to pay tax
- Unreported income
- Organized crime
- Failure to withhold taxes
- Violation of tax laws
How to file an IRS Whistleblower Claim
A whistleblower claim must be filed on IRS Form 211: Application for Award for Original Information, by completing it and mailing it to the IRS. You will need supporting documentation. Examples include:
- Accounting Records
- Copies of correspondence
- Sales records
- Meeting notes
- Business name registrations
Our California whistleblower attorneys can help you determine specific documentation that would be required in your specific case.
The IRS Whistleblower Office
The IRS Whistleblower Office processes claims and determines whether they warrant further investigation. If so, the Whistleblower Office delegates the investigation to the appropriate office within the IRS. Compensation is only awarded if the IRS determines an underpayment took place and successfully collects proceeds.
Eligibility
The IRS only accepts whistleblower claims from individuals who provide sufficient details and personally identifiable information. The IRS does not accept anonymous claims or claims from corporations or other business entities. Additionally, the following individuals are ineligible to file IRS whistleblower claims:
- Department of the Treasury employees
- Employees whose jobs require them to report suspected fraud
- Individuals with access to taxpayer information in the course of their job duties
$23.5 Million
Settlement won for government fraud in a whistleblower case against one of the world’s largest medical device manufacturers
$240 Million​
Settlement in a nationwide defective medical device case involving defective pacemakers and cardiac defibrillators against Boston Scientific and Guidant
$12.95 Million
John R. Parker recently handled a case against the medical device company, Biotronik, Inc. for claims that they defrauded state and federal government agencies.
$4.7 Million
Brooks Cutter and John Parker obtained the settlement on behalf of our whistleblower clients in a case involving government fraud.
Is my award taxable?
IRS whistleblower awards are taxable income. You will receive a Form 1099 or other form as prescribed by law at the time you receive your award.
Can I appeal?
After the IRS determines your award amount, you will receive a letter in the mail from the Whistleblower Office. If you are dissatisfied with your award, you can appeal to the United States Tax Court within 30 days of the determination, but only if the decision was made under §7623(b).
How long does it take to receive compensation?
The length of time to receive compensation varies from several months to several years. Investigating the claim, contacting the taxpayer, exhausting the taxpayer’s appeals, and ultimately collecting the past-due taxes can take a substantial amount of time.Â
Providing the IRS with sufficient information and strong supporting documentation can help reduce this timeframe. Our whistleblower attorneys can review your documents and advise you on additional evidence you could provide that will assist the IRS.
How much time do I have to file a whistleblower claim?
The IRS statute of limitations varies based on information specific to each claim. For most tax returns, the IRS has three years to perform an audit. However, if the IRS believes the error is substantial, with substantial being defined as an underpayment of 25 percent or more, the IRS has six years to audit the tax return.
In cases of actual fraud, there is no statute of limitations. However, the burden of proof for fraud is significantly high. The statute of limitations can impact whistleblowers. Due to the substantial caseload borne by the IRS and the detailed nature of tax investigations, whistleblowers should report cases to the IRS as soon as possible.
How can a whistleblower lawyer help me?
Preparing an IRS whistleblower claim with sufficient information and supporting evidence requires a thorough understanding of tax laws, business law, and accounting practices. Without this knowledge, even if you have a meritorious claim, you risk the IRS denying your claim on the grounds of insufficient evidence.
Our attorneys have over 130 years of combined experience navigating the legal system, helping whistleblowers, and dealing with the IRS. We are familiar with IRS requirements, and we can help you build a strong case file for the IRS.
Why should I choose Cutter Law P.C.?
At Cutter Law, P.C., our attorneys understand the difficult position in which whistleblowers find themselves. We appreciate the courage whistleblowers demonstrate when they place their jobs, financial status, and personal reputations on the line for the sake of doing the right thing.
Whistleblowers who are discovered face persecution and isolation from colleagues. Our attorneys offer caring, confidential support you can trust. We will guard your identity to the fullest extent possible, but if it must become known, we will vigorously defend your rights against retaliation.Â
We have recovered over 100 million dollars on behalf of whistleblowers, those who are wrongfully terminated, and personal injury victims, including the following:
- $23.5 million settlement in a whistleblower case against Medtronc, Inc., a large medical device manufacturer
- $4.7 million settlement in a government fraud whistleblower case
Our track record of success is the result of our work ethic and dedication to each client. With a Cutter Law P.C. attorney on your side, you can trust that your rights will be protected and your case will be represented vigorously. Our firm does not charge legal fees until after we recover compensation.Â
If you have witnessed tax fraud and you are unsure what to do, a confidential, no-obligation case review with one of our attorneys can help you determine your next steps. The IRS will need as much time as possible to review your case, so it is important to get started as soon as possible. Contact us today for a free consultation.
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Our Office Locations
Sacramento Office
401 Watt Avenue Suite 100
Sacramento, CA 95864
Phone: 916-290-9400
Oakland Office
Cutter Law P.C.
1999 Harrison Street Suite 1400
Oakland, CA 94612
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