IRS Tax Whistleblower Articles

THE FERRARO LAW FIRM

Contact:

David A. Jagolinzer, Esq.
The Ferraro Law Firm
305-375-0111
daj@ferrarolaw.com

For Immediate Release

Record $2 Billion Tax Whistleblower Submission Filed

December 11, 2007

WASHINGTON (DC) Today The Ferraro Law Firm submitted a tax whistleblower submission of more than $2 billion to the recently created IRS Whistleblower Office. This is the largest tax whistleblower submission ever made to the IRS Whistleblower Office. This breaks the record of the next largest submission of approximately $1 billion, made on October 9, 2007, which was also filed by The Ferraro Law Firm.

In this most recent submission, a tax whistleblower has come forward to allege that one of the world's largest companies has underpaid its U.S. tax liability by more than two billion dollars. "The amount at issue here may seem shocking," said Scott A. Knott, a Tax Partner in the Washington office of The Ferraro Law Firm, "but when you are dealing with multinational corporations, tax issues that run into the billions of dollars are not that unusual." "We have been keeping our eye on the tax exposure disclosures that publicly held companies have been making for the first time this year under FIN 48 and Sarbanes-Oxley, so we know that there are many more billion dollar issues out there," said Gregory S. Lynam, also a Tax Partner with The Ferraro Law Firm's Washington office. When the IRS Whistleblower Office finally issues its first Annual Report - which it must do by December 20, 2007, pursuant to the Tax Relief and Health Care Act of 2006 (P.L. 109-432) - "The Ferraro Law Firm expects to see signs of a significant increase in both the quantity and quality of the tips the IRS has been receiving," said founding Partner James L. Ferraro.

Congress has also mandated that guidance be issued for the operation of the new tax whistleblower program. "Look for a Notice to be issued that answers some of the common questions that the IRS Whistleblower Office has been fielding as well as instructions for how to make a complete submission," said Knott. "Because the program is still in its relative infancy, there will be many questions left unanswered, but we expect that as this program's profile raises more of the open issues will come to light and will be resolved," said Lynam. In addition, Proposed Regulations which should follow the IRS Whistleblower Office Annual Report should help take some of the uncertainty out of potential tax whistleblower's minds when weighing the risks of making a submission against the considerable rewards available. As there is no cap on the amount of an award that a tax whistleblower can receive from the IRS, and a tax whistleblower can receive up to 30 percent of the amount the IRS collects as a result of their information, rewards to be paid in some of the larger cases filed to date may be in the hundreds of millions of dollars. A 30 percent reward can be granted only where the tax whistleblower makes a substantial contribution to the IRS's case, so it is vital for potential tax whistleblowers to seek the advice of tax counsel to maximize their contribution.

The Ferraro Law Firm's tax lawyers have represented some of the world's largest companies and wealthiest individuals and have learned first-hand about the extent of tax underpayments. Knott and Lynam joined the firm at the end of July from prominent Washington, D.C. tax practices to focus on tax whistleblower cases. For more information on The Ferraro Law Firm's tax group and tax whistleblower submissions, call 1-800-275-3332 or visit www.tax-whistleblower.com.