IRS Whistleblower Awarded $38 Million.

by | Oct 29, 2012 | Administration of Whistleblower Claims, Award Determinations, IRS Whistleblower Office, Whistleblower Awards | 5 comments

We are excited to share some good news … the IRS has awarded $38,037,899 to one of our clients for providing information about a tax avoidance scheme perpetrated by one of the nation’s largest corporations.  We respect our client’s wishes to remain anonymous and are therefore we are not authorized to comment on the specifics of the tax issues that led to this $38 million award.  We can say that the issues involved were more akin to aggressive corporate tax planning than outright fraud, and the tax adjustments the IRS made were commensurate with the factual and legal allegations we made in our submission to the IRS. 

Both the name of the company and the name of the whistleblower have remained completely confidential throughout this whole process, and remain so even after payment of this award.  The company was in the top half of the annual Ferraro 500 list, which reorders the Fortune 500 companies based on the size of those companies’ Uncertain Tax Positions.

Before agreeing to the proposed award, we went through the administrative award determination procedure.  During the administrative award determination procedure, we were able to thoroughly review the IRS’s proposed award computation.  This is a crucial step for any whistleblower claim involving a complex corporate return.  We were able to aid the process by submitting our own proposed award computation to the IRS prior to the IRS coming up with their proposed award computation.  Also, as we have written about before on this blog, the IRS is withholding on the award payments that it is making.  In order to ensure that the IRS did not over withhold millions of dollars, we negotiated a withholding agreement with the IRS on behalf of our client. 

It has been great to see years of work come to fruition.  This particular claim was filed shortly after The Ferraro Law Firm began representing whistleblowers in front of the IRS.  This is within the 5 to 7 years that the IRS estimates on average it takes to work a whistleblower claim from start to finish.  It has been a long journey with a great ending.  

Lynam Knott