Billionaires are paying an even lower marginal rate than previously thought.
Bloomberg News/Businessweek’s Jesse Drucker makes an astute observation about how billionaires either delay or escape income taxes in his article “U.S. Billionaires Avoid Reporting Cash to IRS.” The article describes how several people on the...
More Swiss Bank Accounts Exposed
It has been known for some time that Credit Suisse was the latest target in the crosshairs of the IRS and Department of Justice for hiding money on behalf of U.S. taxpayers. Today’s Wall Street Journal article, Credit Suisse to Hand Over Account Data,...
Study Shows Corporate Tax Dodging Is Common
The IRS needs whistleblowers now more than ever. A recently released study by the Citizens for Tax Justice and the Institute on Taxation and Economic Policy examined 280 of the current Fortune 500 and found a general pattern of decreasing tax rates,...
Another look at Cooper v. Commissioner.
I wanted to highlight an article published in the September 19, 2011, issue of Tax Notes, "Scratching Our Heads Over Cooper v. Commissioner" by Michelle M. Kwon. In this article, Ms. Kwon gives a thoughtful discussion of the Tax Court’s jurisdiction to...
GAO report critical of delays in processing IRS Whistleblower Claims.
It is hardly news that the IRS can be a slow moving, and an often-frustrating agency to work with. These inefficiencies can discourage potential whistleblowers from coming forward. In an effort to improve the IRS Whistleblower Program, the GAO conducted a...
Whistleblower Regulations Included on IRS Priority Guidance Plan
On Friday, September 2, 2011, the IRS announced its 2011-2012 Priority Guidance Plan. The 2011-2012 Priority Guidance Plan lists 317 projects that the IRS intends to work on over the next year, including regulatory guidance for the Whistleblower Program under...
IRS Concedes Tax Court Jurisdiction Upon Delivery of “No Award Determination” Letter.
Yesterday the United States Tax Court decided Friedland v. Commissioner, T.C. Memo 2011-217 (Sept. 7, 2011) in favor of the Internal Revenue Service. Friedland may sound familiar to some, as his previous case against the IRS did not get very far...
Wall Street Journal article about how to report tax underpayments to the IRS
This weekend Laura Sanders of the Wall Street Journal published an article interestingly titled “Taxes: How To Turn Your Neighbor In To The IRS”, in which she described how the IRS Whistleblower Program works and the keys to making a good submission. ...
25 Companies Who Pay Their CEO’s More Than They Pay Uncle Sam
The recently released study by Institute for Policy Studies that identified 25 Fortune 500 companies who's CEOs were paid more last year than they paid in federal income tax naturally piqued our interest, and created a buzz in the media as well. David...
Why the IRS Needs to Fix the IRM and Stop Improperly Delaying Whistleblower Award Payments
Today The Ferraro Law Firm sent out a letter to IRS Commissioner Douglas Shulman (PDF) disputing an IRS policy that is negatively effecting most tax whistleblowers. In July of 2009 Chief Counsel decided – without telling anyone – that the IRS...
Are Criminal Fines “Collected Proceeds” under section 7623?
Congratulations to our associate, Erica Brady, for the publishing of her article, Are Criminal Fines “Collected Proceeds”?, in the Summer 2011 edition of the ABA Section of Taxation NewsQuarterly. She has previously blogged about criminal fines as tax...
IRS Whistleblower Office Report for 2010 Shows Increased Submissions and Collections
The IRS has released on its website the “Fiscal Year 2010 Report to the Congress on the Use of Section 7623,” which details the progress of the IRS Whistleblower Office over the Fiscal 2010 year (thru September 30, 2010). The first and most important...
Cooper Round 2: Tax Court Reaches Right Legal Conclusion; IRS Sends Wrong Whistleblower Message
The US Tax Court just released its summary judgment decision in William Prentice Cooper, III v. Commissioner, 136 T.C. No. 30 (June 20, 2011). In the first true exercise of its new jurisdiction over tax whistleblower cases, the Tax Court showed that it will...
Study Urging Corporate Tax Reform Also Highlights Need for More Focused Enforcement
On June 1, 2011, Citizens for Tax justice issued a preliminary report [PDF] showing that 12 major United States corporations had a cumulative effective tax rate of -1.5% on $171 billion in United States profits. The preliminary report is a preview of a larger...
IRS Holds Public Hearing on Proposed Regulations on Whistleblower Awards
Last week, Ferraro Law Firm partner, Scott Knott, spoke at the IRS’s public hearing on Proposed Treasury Regulations on the definition of “collected proceeds” in the context of paying whistleblower awards under section 7623.
Scott joined other practitioners in pointing out that the Proposed Regs are too narrow in scope and may prevent the IRS for paying awards that are otherwise authorized under the statute. As Scott noted, the current language “unduly ties the hands of the IRS Whistleblower Office.”
The tax press picked up on Scott’s message that the current language of the Reg unreasonably limits the scope of the statute and may unjustifiably shackle the IRS when it comes time to pay awards. Jeremiah Coder of Tax Notes Today, TNT 2011-10213 [PDF], highlighted Scott’s point that problems with the current wording are a “breadth issue.” Mr. Coder’s article reported that the other practitioners’ testimony echoed Scott’s message: the IRS needs to adopt a broader definition of “collected proceeds.” Similarly, CCH, CCH Federal Tax Day (May 11, 2011) [PDF], relayed Scott and the other practitioners’ message that the IRS needs to expand the scope of the definition of “collected proceeds.” The CCH article noted that whistleblower-favorable language will encourage more whistleblowers to come forward with information about tax evasion.
Are Criminal Fines Part of “Collected Proceeds”?
PMTA 2010-60, Criminal Fines and Whistleblower Awards [PDF], is a line in the sand signaling that the IRS is willing to litigate whether criminal fines are properly included in “collected proceeds.” The Proposed Treasury Regulations [PDF] are...
Why is the IRS Withholding on Whistleblower Award Payments?
We informed the Whistleblower Office three years ago that we did not believe that the IRS was either required to or had the legal authority to withhold on award payments to whistleblowers under section 7623. With the payment earlier this month of the first...
Proposed Regulations on Whistleblower Awards Draw Comments
Yesterday I filed comments with the Treasury Department [PDF] on behalf of our clients about the Proposed Regulations regarding what “collected proceeds” [PDF] should mean when determining whistleblower awards under section 7623(b). There will...
IRS Finally Pays an Award Under the Enhanced Whistleblower Provisions
A month ago on this blog I said “The first tax whistleblower award payments under the enhanced provisions of section 7623(b) are imminent, likely within the next couple months or sooner.” I got a lot of questions from colleagues and clients about it,...
How to Avoid Unintended Liability When Making a Whistleblower Disclosure
The potential civil and criminal liability of whistleblowers was discussed at the Offshore Alert Conference in Miami, Florida earlier this week. Attention was again directed towards the pitfalls of how Bradley Birkenfeld’s disclosure to the government...