IRS Tax Whistleblower Articles

Tax Whistleblower Action Claims $4.4 Billion Tax Underpayment by Fortune 500 Company

A submission to the Internal Revenue Service Whistleblower Office alleges that a Fortune 500 company has underpaid its U.S. tax liability by more than $4.4 billion--over a short period of time--by engaging in abusive tax transactions, an attorney representing the whistleblower announced June 13.

IRS established the Whistleblower Office in 2007 to collect information about tax fraud and evasion and must, by law, pay a reward of up to 30 percent of the amount collected to the whistleblower.

"In our experience, $4.4 billion is just the tip of the iceberg when it comes to corporate tax underpayments," Scott Knott, a tax partner with the Ferraro Law Firm in Miami, said in an e-mail to BNA.

The Ferraro Law Firm claims it has now brought to the government's attention dozens of taxpayers that have collectively underpaid their taxes by more than $10 billion.

Stephen Whitlock, director of the Whistleblower Office, told tax practitioners in May that during 2007 the office received about 80 submissions that appear to meet the qualifications for awards of 15 to 30 percent of the amount IRS ultimately collects (93 DTR G-3, 5/14/08). It said that, since December 2007, it has received another 200 submissions, he said.

"This particular multinational company started with smaller tax evasion plays and became emboldened after it continually got away with fraud," Knott said. "After today, that will change."