Tagtax issues

Blowing the Whistle can be more Lucrative than Winning the Lottery

Businesswoman holding financial reward for whistle blower claim to the IRSBlowing the whistle on a tax-payer that has failed to pay taxes that they owe could be a cause for huge financial gain. Due to the large number of budget cuts within the IRS, the number of audits that the IRS can conduct has been greatly reduced. As a result of this, the Internal Revenue Service is depending more and more on informant claims.

The Bipartisan Budget Act of 2018 has expanded the definition for whistleblower informant awards. question. If the credible information from the informant is used in any way to collect taxes, penalties, interest or other quantities, the IRS may pay an award. The IRS has the ability to pay a substantial award of varying degrees depending on the amount of unpaid taxes in question. If the unpaid tax amount exceeds $2 million, and some other stipulations are met, the IRS will pay a percent of the amount acquired from the tax-payer or business in question. According to Internal Revenue Code 7623, there is technically no limit on how much the IRS can award to an informant if there information proves beneficial. Generally speaking though, the IRS will pay 15 to 30 percent of the amount collected.

There are some other qualifications that must be met: if the case concerns an individual, his or her gross income per year has to be greater than $200,000. There is a second award program for whistleblowers reporting on disputes of less than $2 million dollars and or cases of individual taxpayers with annual gross incomes of less than $200,000. The award for these cases is, of course, smaller, with a greatest possible award being 15 percent of the funds collected, up to $10 million.

At the end of the day, if you help the IRS out in this way by simply telling the truth about what you know, the odds of winning the reward are way higher than the odds of winning the lottery. Read more…

Learn more about the author, Vivian Hoard

Credit Suisse and Declaration of Offshore Funds by Vivian Hoard

The IRS is cracking down on individuals with offshore accounts who have continued to withhold the declaration of the offshore funds. This is evidenced by the jury’s verdict in the case of Carl R. Zwerner on May 28, 2014. The IRS is not exclusively focusing on Swiss accounts. They are interested in information about the accounts of US Citizens and residents in financial institutions around the globe. So far more than 60 countries have complied and provided information. IRS investigations are underway in previously protected countries like Isle of Mann, Israel, Lichtenstein, and Singapore.

In Zwerner’s case, the jury established that the taxpayer consciously failed to file the Report of Foreign Bank and Financial Accounts forms for three out of the four years charged. Additionally, the Jury found that Mr. Zwerner was not fit for the IRS’s 2009 Offshore Voluntary Disclosure Program and its limited penalty structure. In this case, the IRS is seeking penalties of 50 percent of the account for all of the involved years. Even though the Judge will ultimately decide the penalties, the taxpayer’s exposure is in excess of 100 percent of the undisclosed account.

Previous to Zwerner’s case, the IRS has restricted penalty requests to one year or 50 percent of the account. However, it can be expected that FBAR penalties in excess of 100 percent will become standard. As the identities of Credit Suisse customers become known to the IRS, we expect IRS audits and projected penalties to increase rapidly.

In conclusion, it should be noted that Mr. Zwerner may have been able to benefit from the Offshore Voluntary Disclosure program if he had he taken more timely action. Therefore, it is still possible for all taxpayers with undisclosed foreign accounts to act rapidly before their names are disclosed to the IRS. Read more…

Learn more about the author, Vivian Hoard

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