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If you haven’t already heard of Brad Birkenfeld, then you should take some time to do some reading and brush up on the events surrounding one of the most interesting and large reaching cases of reporting tax fraud in American history.

A whistleblower is someone that registers voluntarily with the IRS for the purposes of reporting IRS tax fraud. Brad Birkenfeld was working for UBS (The largest bank in Switzerland) when he contacted the IRS in order to report perceived violations on the part of UBS in regards to the tax agreements the bank had entered into with the IRS.

The lesson to be learned from Birkenfeld has to do with the definition of a whistleblower. In order to report IRS tax fraud under that program, you have to register with the IRS. However, despite Birkenfeld’s attempt to do so, he was later found to have not met the criteria of that classification. As such, he ended up becoming sentenced to a 40 month prison sentence for his part in the irregularities that had transpired.

The Justice Department tax prosecution in this case stated that they do not participate in the program, and a senior attorney later clarified the definition of someone that can receive protection in cases of reporting tax fraud. The primary basis for denying this protection to Birkenfeld seems to stem from the fact that people must come forward early, and give complete and truthful disclosures in order to be granted any protection. It was judged that Birkenfeld did not qualify.

Despite the outcome in this case, it is clear from the events that transpired that people who are brave enough to step forward and report on tax fraud are very important. They help to ensure the preservation of the laws which have all been put in place for a very specific reason. Evidence of how important Birkenfeld’s actions were thought to be is clear in that he was named “Person of the Year” by “Tax Anaylsts” and when Dean Zerbe called him the most important tax whistleblower of all time.

There are perhaps then two lessons that we can take away from the Brad Birkenfeld case. Obviously in order to get legal protection when reporting tax irregularities, you must step forward early and offer complete truth. The second lesson is that this is a responsibility of all discerning citizens, and Birkenfeld can be held up as an example of someone who did the right thing when he realized the situation that he was witnessing.

Tags: Brad Birkenfeld, irs, IRS tax fraud, tax fraud, tax prosecution, taxes, whistleblower
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Many people have heard of whistleblowing, but it can be hard to find specific information that lets you know how to do this in concrete terms that are understandable by someone who is not a lawyer or a CPA.  Luckily, reporting tax fraud is becoming much more defined as the government and the IRS attempts to find ways to clarify the laws. They also have been trying consistently to come up with ways to protect people that come forward as an IRS whistleblower, and it is important to understand these changes to get an idea of how the program really works.

In some whistleblower cases in the past, it was extremely dangerous to a person to come forward and report their employer of tax evasion. An IRS whistleblower was just as likely to be fired as anyone else for coming forward and reporting tax fraud. However, experience has taught the government much in this regard and there now exist several federal and state laws that attempt to protect the rights of whistleblowers, and which do not allow for termination of an employee based on providing this kind of information in most cases.

There are still some gaps in the laws which provide protection to someone reporting tax fraud. Attention has been drawn to this by whistleblower cases which involve not for profit organizations. The federal law known as SOX (Sarbanes-Oxley Act) protects workers for non-profits against retaliation in such cases. There has not been as much development at the State level in this regard however, and although there is some protection afforded to non-profit employees, it is not yet something that is ironclad. This can and has resulted in lawsuits for wrongful termination when an employee of a non-profit organization feels he or she was let go as a result of reporting on wrongful activities on the part of their employer.

It is also interesting to note that along with increased protection for those who provide information about tax wrongdoings, the IRS has actually gone further to offer actual rewards to those who provide information which can result in the IRS collecting funds owed to them. This program has existed for some time, but has been expanded in the last several years to help compensate informants better, and with bigger rewards in cases of large scale tax evasion. The dynamics of whistleblowing have shifted, putting the emphasis and the reward on reporting tax evasion rather than on burying knowledge of it for fear of employment related consequences.

Tags: cpa, irs, IRS whistleblower, tax, tax fraud, taxes, whistleblower
Posted in Uncategorized | | No Comments »

Many people have heard of whistleblowing, but it can be hard to find specific information that lets you know how to do this in concrete terms that are understandable by someone who is not a lawyer or a CPA.  Luckily, reporting tax fraud is becoming much more defined as the government and the IRS attempts to find ways to clarify the laws. They also have been trying consistently to come up with ways to protect people that come forward as an IRS whistleblower, and it is important to understand these changes to get an idea of how the program really works.

In some whistleblower cases in the past, it was extremely dangerous to a person to come forward and report their employer of tax evasion. An IRS whistleblower was just as likely to be fired as anyone else for coming forward and reporting tax fraud. However, experience has taught the government much in this regard and there now exist several federal and state laws that attempt to protect the rights of whistleblowers, and which do not allow for termination of an employee based on providing this kind of information in most cases.

There are still some gaps in the laws which provide protection to someone reporting tax fraud. Attention has been drawn to this by whistleblower cases which involve not for profit organizations. The federal law known as SOX (Sarbanes-Oxley Act) protects workers for non-profits against retaliation in such cases. There has not been as much development at the State level in this regard however, and although there is some protection afforded to non-profit employees, it is not yet something that is ironclad. This can and has resulted in lawsuits for wrongful termination when an employee of a non-profit organization feels he or she was let go as a result of reporting on wrongful activities on the part of their employer.

It is also interesting to note that along with increased protection for those who provide information about tax wrongdoings, the IRS has actually gone further to offer actual rewards to those who provide information which can result in the IRS collecting funds owed to them. This program has existed for some time, but has been expanded in the last several years to help compensate informants better, and with bigger rewards in cases of large scale tax evasion. The dynamics of whistleblowing have shifted, putting the emphasis and the reward on reporting tax evasion rather than on burying knowledge of it for fear of employment related consequences.

Tags: cpa, irs, IRS whistleblower, tax, tax fraud, taxes, whistleblower
Posted in Uncategorized | | No Comments »

If you haven’t already heard of Brad Birkenfeld, then you should take some time to do some reading and brush up on the events surrounding one of the most interesting and large reaching cases of reporting tax fraud in American history.

A whistleblower is someone that registers voluntarily with the IRS for the purposes of reporting IRS tax fraud. Brad Birkenfeld was working for UBS (The largest bank in Switzerland) when he contacted the IRS in order to report perceived violations on the part of UBS in regards to the tax agreements the bank had entered into with the IRS.

The lesson to be learned from Birkenfeld has to do with the definition of a whistleblower. In order to report IRS tax fraud under that program, you have to register with the IRS. However, despite Birkenfeld’s attempt to do so, he was later found to have not met the criteria of that classification. As such, he ended up becoming sentenced to a 40 month prison sentence for his part in the irregularities that had transpired.

The Justice Department tax prosecution in this case stated that they do not participate in the program, and a senior attorney later clarified the definition of someone that can receive protection in cases of reporting tax fraud. The primary basis for denying this protection to Birkenfeld seems to stem from the fact that people must come forward early, and give complete and truthful disclosures in order to be granted any protection. It was judged that Birkenfeld did not qualify.

Despite the outcome in this case, it is clear from the events that transpired that people who are brave enough to step forward and report on tax fraud are very important. They help to ensure the preservation of the laws which have all been put in place for a very specific reason. Evidence of how important Birkenfeld’s actions were thought to be is clear in that he was named “Person of the Year” by “Tax Anaylsts” and when Dean Zerbe called him the most important tax whistleblower of all time.

There are perhaps then two lessons that we can take away from the Brad Birkenfeld case. Obviously in order to get legal protection when reporting tax irregularities, you must step forward early and offer complete truth. The second lesson is that this is a responsibility of all discerning citizens, and Birkenfeld can be held up as an example of someone who did the right thing when he realized the situation that he was witnessing.

Tags: Brad Birkenfeld, irs, IRS tax fraud, tax fraud, tax prosecution, taxes, whistleblower
Posted in Uncategorized | | No Comments »