In March a long standing debate between the IRS and two whistleblowers finally came to an end. This long pending debate was regarding the amount of money as compensation that can be claimed by whistleblowers who report any sort of tax fraud or other tax related offences successfully.
There is a scheme created by the IRS that allows governments to provide whistleblowers with compensation if the amount of money recovered by the IRS is over that of two million dollars. Once the money has recovered a whistleblower can receive up to thirty percent and a minimum of fifteen percent of the proceeds recovered.
How is compensation calculated in a whistleblower case?
Two whistleblowers in the year 2013 gave the IRS a clear tip about a Swiss bank that was operating in order to help people avoid paying their taxes. The bank ended up having to pay $20 million in taxes and $54 million in fines and fees. This $54 million was because the government seized assets that were linked to a crime, in this case tax fraud. While the government always gives the whistleblowers a percentage of the monies collected, they have never awarded whistleblowers with a percentage of the fines and fees. The two whistleblowers argue against this, requesting a percentage of the $54 million also.
They argue that as it is all proceeds that come as a result of whistleblowers tips, that the word proceeds when used in the whistleblower’s compensation scheme should without a doubt include the money from fines and fees.
Initially the whistleblowers were awarded 24 percent of the $20 million recovered. When the whistleblowers pressed for further monies from the amount received due to fees and fines the IRS, disagreed and the matter was then taken to court. The court ruled that the whistleblowers should be given a cut of the $56 million also. Whilst appealing the decision the IRS agreed to pay the whistleblowers a further $12.8 million out of court.
What this means for any future whistleblower cases:
Whilst this case is just one, it is upholding the idea made by the court that the word “proceeds” covers any and all money made as a result of the whistleblower tip. It also means that from now on any new whistleblower cases, have the option and ability to ask for more compensation than just a percentage of the taxes recovered. It is for this reason imperative that a close eye is kept on all results of a whistleblower tip, and the monies recovered in every form.
Hire a Los Angeles Whistleblower Attorney to help you:
Whistleblowers can be put in a difficult position at work but with the help and guidance of a Los Angeles Whistleblower Attorney, you can do the right thing and report a company behaving fraudulently. Whilst claiming your rightful compensation can also be a difficult process a Los Angeles Whistleblower Attorney can help you get the money and compensation you deserve for taking a risk. For your best options please contact us today on 310-527-6994.