It was announced on September 11, 2012 that the Internal Revenue Service awarded $104 million to whistleblower Bradley C. Birkenfeld for his role in providing information regarding an illegal offshore banking scheme by his employer, UBS. Not only is this the first major award by the IRS since its whistleblower program went into effect in 2006, it is believed to be the largest award given to an individual under any U.S. whistleblower program.
Birkenfeld learned in 2005 that UBS was providing illegal tax avoidance advice to its clients, and reported it to the bank’s compliance office. When UBS failed to alter its practices, in 2007 Birkenfeld informed U.S. authorities of the bank’s activities, which led to an enforcement action. In February 2009, UBS entered into an agreement with the government, pursuant to which it paid $780 million in fines and provided the names of more than 4,500 American clients who had participated in scheme. The government implemented a tax amnesty program that year, in which more than 14,000 Americans participated, leading to the recovery of more than $5 billion in unpaid taxes.
Prior to the adoption of the current whistleblower program, the IRS had discretion whether to pay an award to a whistleblower. IRS guidelines set awards at 1 percent, 10 percent, or 15 percent, and awards were not appealable. Under changes that were adopted in 2006, the IRS is required to pay whistleblowers 15 percent to 30 percent or recoveries which exceed $2 million. Moreover, whistleblowers now have the right to appeal an award to the Tax Court.
The consumer and tax payer rights law firm of Lubin Austermuehle represents whistleblowers who are pursing qui tam lawsuits at any level of government or for violations of the securities laws and IRS code, including claims under the Illinois Whistleblower Act, the Chicago whistleblower ordinance, the Dodd-Frank Act and the federal False Claims Act. Based in Chicago and Oak Brook, Ill., our Rockford and Joliet area qui tam and False Claims Act lawyers stand ready to represent whistleblowers throughout the United States — regardless of whether prosecutors have decided to join the lawsuit. If you know about fraud against a government agency and you’re ready to speak up, you can learn more about whistleblower lawsuits at a free, confidential consultation. To set one up, please contact Lubin Austermuehle online or call 630-333-0333 today.