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February 6, 2023

Bonus Watch ’19: Tax Whistleblowers

Snitching on tax cheats could be just as lucrative in 2019 as it was in 2018, according to Dean Zerbe, national managing director for alliantgroup and former tax counsel for the Senate Finance Committee.

In his latest column for Forbes, Zerbe noted that there was a tenfold increase in tax whistleblower awards last year:

Honest, hard-working taxpayers should be joyous with the news that the Director of the IRS whistleblower office – Lee Martin — just issued its FY 2018 annual report and announced that the IRS collected $1.441 billion in taxes, penalties and interest from big-time tax cheats in FY 2018 thanks to information provided by whistleblowers.

Similarly, whistleblowers should be dancing in the street – with Director Martin announcing $312 million in awards made to whistleblowers in FY 2018 – up from $33.9 million in awards made in FY 2017.

Tax whistleblowers received from the IRS an average award of 21.7% based off of $1.441 billion in taxes, penalties and interest that were collected in FY 2018 – thanks to the information provided to the IRS by whistleblowers. These numbers are game changers when it comes to going after tax fraud – and suggest that finally, finally, the whistleblower program is becoming ingrained into the work of the IRS and that more and more of the IRS embraces the great value of the information provided by whistleblowers. The IRS made 31 awards under the mandatory award program (7623(b))(major awards) and 186 smaller awards  under 7623(a).

And Zerbe is expecting 2019 to be just as good, if not better, than 2018 for those blowing the whistle on tax wrongdoing:

I expect this good news of more dollars to the treasury (and less burden for honest taxpayers) and higher awards for tax whistleblowers to keep rolling on based on what I’m seeing first-hand in my practice and from talking to other lawyers representing tax whistleblowers – and underscored by the new practice of the whistleblower office issuing preliminary award recommendation letters (PARLs) prior to the refund statute expiration date (a big help). The tax whistleblowers represented by my law firm Zerbe, Miller, Fingeret, Frank & Jadav, (ZMF) – as well as my superb co-counsel on these cases Steve Kohn at Kohn, Kohn and Colapinto (KKC) law firm – have already received award letters of over $84 million for this fiscal year to date – with our whistleblower clients previously receiving over $158 million in awards in FY 2018.

You can download the latest IRS whistleblower report here.

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