Tax Litigation Law Office of Scott Kauffman
(949) 474-1820

Hackney Literary Award
Mighty River Short Story Contest Winner

IRS pays reward to banker who showed offshore tax evasion at UBS

Just how much does a whistleblower stand to gain if he discloses valuable information on tax evasion and other illegal tax practices? As much as 30 percent of the total taxes the Internal Revenue Service recoups as a result of the information. For those who pull back the curtain on particularly large instances of tax evasion, a very handsome payday may be their reward.

At the moment, there is arguably no greater tax evasion concern than that represented by offshore bank accounts. California readers may have heard the story of the former Swiss banker who revealed tax evasion practices at UBS. His disclosures helped provide the IRS with the leverage it needed to force the Swiss bank to hand over the names of U.S. taxpayers with accounts there. In addition, UBS paid $780 million to the government to settle tax evasion claims.

The banker has now received his reward: $104 million, which is the first substantial payment the IRS Whistleblower Office has made since its founding in 2007, according to the man's attorneys. But coming forward has had some drawbacks for the banker as well. Although he fought against it, he was sentenced to serve over three years in prison for his part in the bank's tax evasion practices. He is currently under home confinement.

Despite the potential for prison time, financial rewards provide a potent incentive for people to reveal prohibited tax practices. Those with offshore accounts may fear having their accounts made known by a whistleblower, and already over 35,000 U.S. taxpayers have participated in the IRS's voluntary disclosure program, filling the Treasury's coffers with billions of dollars in taxes.

The IRS itself stated that it views the whistleblower law as an important implement to enforce compliance. It is important that taxpayers with overseas accounts follow all reporting and taxation rules.

Source: CNN Money, "UBS whistleblower nets $104 million reward," James O'Toole, Sept. 12, 2012

• In addition, there are procedures available for taxpayers to come back into compliance if they have lapsed for a time. If you would like more information on my firm, please visit my Irvine offshore bank account page.

No Comments

Leave a comment
Comment Information