Huge: IRS awards $104 million to whistleblower Birkenfeld

by Kurt Schulzke

Kudos to Bradley Birkenfeld and the IRS Whistleblower Office!  Six years into its “new” Whistleblower Program, the IRS has finally paid its first award [see update below], a whopping $104 million to banking whistleblower Bradley Birkenfeld. Talk about sending a message. In its determination letter, the IRS provided [see update below] considerably more information about Birkenfeld’s case than the SEC divulged about its first, dramatically smaller, Whistleblower Program award to an unidentifed whistleblower.  Some details on the IRS award:

Birkenfeld provided information on taxpayer behavior that the IRS had been unable to detect, provided exceptional cooperation identified [and] identified connections between parties to transactions . . . The comprehensive information provided by the whistleblower was exceptional in both its breadth and depth. While the IRS was aware of tax compliance issues related to secret bank accounts in Switzerland and elsewhere, the information provided by the whistleblower formed the basis for unprecedented actions against UBS.

This level of detail gives other potential whistleblowers guidance on what the IRS sees as most valuable in whistleblower contributions.  More details on the case are offered by the National Whistleblower Center.

9-26-12 UPDATE: According to September 14 remarks by IRS Whistleblower Office chief Stephen Whitlock, at the annual TAF Conference in Washington, D.C., the Birkenfeld award was not the first Section 7623(b) award. Whitlock said that the IRS has already made “several” awards but revealed nothing about them. Furthermore, the IRS should not get credit for disclosing anything about the Birkenfeld award. That information was apparently released by Birkenfeld or his attorneys, not by the IRS.

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