IRS pays $104 million to whistleblower
By Stephen Dinan
The Washington Times
September 11, 2012
The IRS has awarded the largest whistleblower award in history — $104 million — to a former UBS banker who gave information that helped expose a $20 billion offshore banking scheme, the whistleblower's lawyers said Tuesday.
Bradley Birkenfeld, the whistleblower, "provided information on taxpayer behavior that the IRS had been unable to detect," the agency said in granting the award.
"The IRS today sent 104 million messages to whistleblowers around the world — that there is now a safe and secure way to report tax fraud and that the IRS is now paying awards," Mr. Birkenfeld's lawyers said in a statement. "The IRS also sent 104 million messages to banks around the world — stop enabling tax cheats or you will get caught."
The National Whistleblower Center said it's the first major award issued under the IRS's tax whistleblower law.
Mr. Birkenfeld was a banker for UBS, a giant Swiss bank, and the information he provided led to fines of nearly $800 million.
"The comprehensive information provided by the whistleblower was exceptional in both its breadth and depth," the IRS said in a memo backing up the award judgment. "While the IRS was aware of tax compliance issues related to secret bank accounts in Switzerland and elsewhere, the information provided by the whistleblower formed the basis for unprecedented actions against UBS AG."
The IRS confirmed the payment in a statement. The agency called the whistleblower law a valuable tool and said the award "reflects our commitment to the law."
Sen. Charles E. Grassley, an Iowa Republican who has been a staunch defender of whistleblowers, said the award was well worth it for taxpayers.
"An award of $104 million is obviously a great deal of money, but billions of dollars in taxes owed will be collected that otherwise would not have been paid as a result of the whistleblower information," he said. "Unfortunately it has taken the IRS nearly four years to settle this whistleblower case. If the IRS is serious about encouraging future whistleblowers, it needs to continue to honor the spirit and intent of the law and issue awards in a timely manner."
The government did prosecute Mr. Birkenfeld for his involvement, and he served time in prison. He was released earlier this year.
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