Tax Fraud
The federal False Claims Act broadly prohibits anyone who does business with the federal government from engaging in fraudulent behavior. Accordingly, there are innumerable circumstances where such fraud may occur, and in which a Whistleblower may bring an action to expose the fraud and recover appropriate damages. An example of such fraud includes:
The Internal Revenue Service rewards Whistleblowers with a percentage of the tax money and penalties recovered with the information provided. In September 2012, Brad Birkenfeld received a $104 million prize for revealing a scheme by wealthy taxpayers who utilized secret Swiss bank accounts to avoid taxation.
Tax fraud is not considered to be a part of the False Claims Act. Persons who reveal serious tax fraud do not need to file a qui tam lawsuit. The fraud is typically reported directly to the Internal Revenue Service (IRS) and the claim will be investigated and pursued by that department. The tax fraud Whistleblower’s identity will be kept secret during the investigation and legal action. Any rewards will be issued following the completion of an investigation, and the recovery of money owed to the government.
Common Types of Tax Fraud:
- Companies or individuals omitting income from foreign stock exchanges;
- Companies or individuals transferring assets outside the United States;
- Overstating the amount of tax deductions;
- Falsifying financial documents or ledgers;
- Claiming false tax deductions;
- Under-reporting employee income;
- Paying employees in cash; and
- Keeping two sets of financial records.
Related Article
Whistleblower Settles Tax Fraud Case & Receives $11.6 Million
A whistleblower who wishes to remain anonymous has received a $11.6 million reward under the Internal Revenue Service’s (IRS) whistleblower award program. The whistleblower’s work translated into tens of millions of dollars recovered by the US Treasury. “The good news is the IRS Whistleblower Office continues to show a willingness to make major Read More »
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