The Importance of Timing

The Ferraro Law Firm
Washington, D.C. — Miami, Florida

The timing of an IRS tax whistleblower claim is a factor that can be easily overlooked, but that is nonetheless important to consider for several reasons, including:

  • Statute of limitations requirements — In general, the statute of limitations on assessments is three years from the time the return was filed. However, many corporate taxpayers extend this period by agreement with the IRS in an effort to resolve their cases before litigation. If you have information that falls outside the general three-year window it does not mean that your information will not be of use. Contact us to discuss statute of limitations issues.
  • The size of the underpayment(s) in question — Section 7623(b) requires that the tax underpayment you are providing information on be at least $2 million when you include the tax, penalties, and interest. When you factor in penalties and interest the size of a tax underpayment often doubles. Furthermore, if you are going to report an underpayment involving an individual taxpayer, the income of that individual must have exceeded $200,000 in the year that the tax was due.
  • "The early bird gets the worm" — Simply put, if you wait too long to report an underpayment, someone else could report the underpayment before you get the chance or the IRS may find it themselves. While this in itself may not preclude you from receiving a portion of any recovered taxes, it certainly could, and at that very least, will significantly reduce any eventual award.

At The Ferraro Law Firm, we help clients in Florida and throughout the world maximize their tax whistleblower awards in many ways. One of these involves timing. How do we accomplish this? Our attorneys thoroughly investigate and prepare each claim with an eye towards both detailed factual documentation AND the actual timing of the claim itself.