tag:blogger.com,1999:blog-48178038869947261072024-03-13T20:08:27.971-07:00Tax Fraud BlogUnknownnoreply@blogger.comBlogger155125tag:blogger.com,1999:blog-4817803886994726107.post-7740293667072524132015-11-13T07:33:00.000-08:002015-11-13T07:33:40.954-08:00We've moved!We are consolidating our blog properties into one main blog that covers all things qui tam, SEC, CFTC and IRS whistleblowers.<div>
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Please visit us over there at <a href="http://whistleblowerlawinsights.blogspot.com/">whistleblowerlawinsights.blogspot.com</a></div>
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If you want more information about Phillips & Cohen LLP, or want to speak with a lawyer about a potential case, you can go to directly to our website at <a href="http://www.phillipsandcohen.com/">www.phillipsandcohen.com</a>.</div>
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Thanks for reading.</div>
Unknownnoreply@blogger.comtag:blogger.com,1999:blog-4817803886994726107.post-91977829284016752102014-11-06T13:16:00.001-08:002014-11-06T13:16:50.513-08:00Report Finds Some of World’s Biggest Companies Use Tax Havens to Avoid Taxes<div class="MsoNormal">
International giants including Pepsi, IKEA and FedEx have
saved billions in taxes by funneling money through Luxembourg, claims a report
by the Washington, DC-based
International Consortium of Investigative Journalists (ICIJ).<o:p></o:p></div>
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ICIJ, a global network of 185 reporters in 65 countries who
collaborate on transnational investigations, reviewed 28,000 pages of leaked
confidential documents to come up with its findings. According to the journalists’ report, big companies create a
complicated accounting and legal structure that allows for movement of profits from
high-tax countries to lower-tax countries – some with tax rates below 1
percent.<o:p></o:p></div>
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“The private deals are legal in Luxembourg but may be
subject to legal challenges outside
of the country,” says a <a href="http://www.huffingtonpost.com/2014/11/05/luxembourg-tax-haven_n_6094544.html">Huffington Post article</a>. The European Union has been
going back and forth with Luxembourg over whether the country has to disclose
tax deals that might violate European law.<o:p></o:p></div>
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As the EU probes continue, the multinational group the
Organization for Economic Cooperation and Development is proposing new rules
that would prevent companies from using common practices to shift profits into
countries considered “tax havens.”<o:p></o:p></div>
Unknownnoreply@blogger.comtag:blogger.com,1999:blog-4817803886994726107.post-4799509430483808212014-11-06T10:56:00.001-08:002014-11-06T10:56:49.527-08:00UBS Exec Acquitted of Helping Americans Evade $20B in Taxes<div class="MsoNormal">
A former UBS AG executive Raoul Weil was found not guilty of
conspiring with US clients to hide $20 billion from the IRS in secret
international bank accounts. “Weil was the highest-ranking Swiss banker
prosecuted under an IRS and Justice Department crackdown on Americans’ use of
offshore accounts to dodge U.S. taxes,” <a href="http://www.theledger.com/article/20141104/NEWS/141109711/1374?Title=Former-UBS-Executive-Found-Not-Guilty-in-IRS-Investigation">reports
the</a><span class="MsoHyperlink"> Associated Press</span>.<o:p></o:p></div>
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The verdict comes as a blow to the US government, which has
been increasingly pursuing international banks and Americans who use offshore
accounts to dodge taxes. It also was surprising: In 2009 UBS paid a $780
million US fine for helping US citizens avoid taxes. The Swiss banking giant
disclosed thousands of American account holder names, many of whom were later
prosecuted by the IRS.<o:p></o:p></div>
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Testimony against Weil detailed the lengths to which the
banker supposedly went in order to conceal wrongdoing. Weil allegedly kept
sensitive client data under a “solitaire” game tab on an encrypted laptop with
an emergency password that would delete any trace of the customer’s data if it
was seen by the wrong person.<o:p></o:p></div>
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<a href="http://www.newsweek.com/ubs-tax-evasion-case-shed-light-swiss-secrets-282637">A
DOJ spokesperson said</a> that, despite the verdict, the US government will
continue pursuing banks, and their executives, suspected of helping wealthy
Americans avoid billions in taxes.<o:p></o:p></div>
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For more commentary on the verdict see <a href="http://www.newsweek.com/ubs-tax-evasion-case-shed-light-swiss-secrets-282637">Newsweek</a>,
<a href="http://online.wsj.com/articles/weil-acquittal-complicates-u-s-tax-evasion-crackdown-1415147634?tesla=y&mod=djemRiskCompliance&mg=reno64-wsj">The
Wall Street Journal</a> and <a href="http://www.cnbc.com/id/102151330#.">CNBC</a>.</div>
Unknownnoreply@blogger.comtag:blogger.com,1999:blog-4817803886994726107.post-30320949238332630542014-10-17T11:01:00.000-07:002014-10-17T11:01:46.696-07:00Trial Starts for Former UBS Executive in Tax Fraud Case<div class="MsoNormal">
The trial of UBS AG’s former chief executive Raoul Weil
started this week in Florida. He is accused of helping American clients avoid taxes
and conceal $20 billion of US taxpayers’ assets in offshore accounts. Weil is
the highest-ranked UBS executive to be prosecuted by the US.<o:p></o:p></div>
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The Swiss banker allegedly helped “black account” holders –
American citizens who didn’t want their assets disclosed to the IRS – hide
millions of dollars and charged them steep fees for the extra service. Weil and
other UBS bankers used multiple credit cards, changed hotels often and avoided
electronic communication with clients, claims the <a href="http://www.foxbusiness.com/markets/2014/10/15/swiss-banker-describes-secrecy-from-irs-in-us-tax-evasion-trial-ex-ubs/">prosecution’s
star witness, Hans Schumacher</a><span class="MsoHyperlink">, who was a banker at UBS.</span><o:p></o:p></div>
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The trial is expected to last several more weeks. If
convicted, Weil could face up to five years in prison. (<a href="http://www.reuters.com/article/2014/10/14/ubs-ag-banker-weil-idUSL2N0S922H20141014">Alleged
Mastermind of UBS Tax Evasion Scheme Faces Trial</a>)<o:p></o:p></div>
Unknownnoreply@blogger.comtag:blogger.com,1999:blog-4817803886994726107.post-53628909039160291702014-10-10T09:32:00.001-07:002014-10-10T09:32:56.098-07:00NJ man sentenced to prison for $65 million tax scheme<div class="MsoNormal">
A New Jersey man has been <a href="http://www.justice.gov/usao/nj/Press/files/Pinski,%20David%20Sentencing%20News%20Release.html">sentenced
to 17 months in prison</a> for filing more than 8,000 fraudulent income tax
returns that sought $65 million from the government. David Pinski and a handful
of others conducted the largest and longest running stolen identity refund
fraud scheme to have been identified, and resulted in a loss of $12 million to
the U.S. government.<o:p></o:p></div>
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Pinski obtained personal identifies of Puerto Rican citizens
and used that information to file electronic 1040s. He and his co-conspirators
then received the fraudulent tax refund checks, cashed and spent them. Some of
the defendants gambled more than $250,000 at casinos, and “resided in a house
worth more than $1.6 million” while supposedly working in a grocery store, says
an <a href="http://cliffviewpilot.com/fort-lee-man-sentenced-to-17-months-in-largest-us-tax-fraud-case-thanks-to-bergen-county-pd/">article
published by the Cliff View Pilot</a>.<o:p></o:p></div>
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The fraud was discovered because the tax forms were filed
electronically from a handful of traceable IP addresses.<o:p></o:p></div>
Unknownnoreply@blogger.comtag:blogger.com,1999:blog-4817803886994726107.post-56998063998127096262014-06-20T12:05:00.002-07:002014-06-20T12:05:57.813-07:00Tax whistleblower news summary for week of June 16<div class="MsoNormal">
The IRS announced changes to its offshore voluntary compliance
programs this week, enforcing harsher restrictions on US citizens who deliberately
dodge taxes through illegal actions, while easing penalties for citizens who unintentionally
evade taxes. The revised programs include a 50 percent penalty on offshore
accounts if there is publicity about the IRS or the Justice Department
investigating a financial institution where the person holds an account. (<a href="http://www.irs.gov/uac/Newsroom/IRS-Makes-Changes-to-Offshore-Programs;-Revisions-Ease-Burden-and-Help-More-Taxpayers-Come-into-Compliance">IRS
Makes Changes to Offshore Programs; Revisions Ease Burden and Help More
Taxpayers Come into Compliance</a>)<o:p></o:p></div>
Unknownnoreply@blogger.comtag:blogger.com,1999:blog-4817803886994726107.post-14388562598771894742014-06-06T13:38:00.000-07:002014-06-06T13:38:20.383-07:00Tax whistleblower news summary for week of June 2 <div class="MsoNormal">
A U.S. Tax Court ruling this week keeps alive an IRS
whistleblower case seeking a $9 million whistleblower reward. The whistleblower
claims the IRS recovered $30 million as a result of information the
whistleblower provided to the IRS. (<a href="http://www.ustaxcourt.gov/InOpHistoric/Whistleblower1094913Memo.Kroupa.TCM.WPD.pdf">United
States Tax Court, Whistleblower 10949-13W</a>)<o:p></o:p></div>
Unknownnoreply@blogger.comtag:blogger.com,1999:blog-4817803886994726107.post-91696637807422236822014-05-23T15:10:00.000-07:002014-05-23T15:10:14.331-07:00Tax whistleblower news summary for week of May 19<div class="MsoNormal">
<span style="color: #1f497d;"><a href="http://www.justice.gov/opa/pr/2014/May/14-ag-531.html">Credit Suisse has agreed
to pay $2.6 billion</a> to the U.S. government, the highest fine ever paid in a
criminal tax case by a bank. Credit Suisse pleaded guilty to helping U.S.
taxpayers file false claims and evade taxes. </span><a href="http://www.politico.com/story/2014/05/credit-suisse-tax-conspiracy-106851.html">Credit
Suisse admitted to destroying documents</a><span style="color: #1f497d;"> and
setting up fake accounts to help U.S. citizens avoid taxes. Another story: </span><a href="http://uk.reuters.com/article/2014/05/20/uk-creditsuisse-investigation-idUKKBN0E00WM20140520">“Credit
Suisse Fined $2.5 billion After Pleading Guilty to U.S. Tax Charge.”</a></div>
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The U.S. Tax Court will allow three IRS whistleblowers to
remain anonymous as they appeal IRS decisions about their rewards. <a href="http://ustaxcourt.gov/InOpHistoric/Whistleblower11332-13WMemo.Kroupa.TCM.WPD.pdf">Two
of the whistleblowers</a> are allowed to <a href="http://ustaxcourt.gov/InOpHistoric/Whistleblower10949-13WMemo.Kroupa.TCM.WPD.pdf">maintain
the seal</a><span class="MsoHyperlink"> on their complaints </span><span class="MsoHyperlink">-- meaning their identities aren’t publicly known</span>
– because the judge agreed their fear of physical repercussions is justified. <a href="http://ustaxcourt.gov/InOpHistoric/Whistleblower13412-12WMemo.Kroupa.TCM.WPD.pdf">The
third whistleblower</a> argued that his identity should remain confidential to
prevent financial retribution by the defendant. </div>
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<o:p></o:p></div>
Unknownnoreply@blogger.comtag:blogger.com,1999:blog-4817803886994726107.post-43791644781849635682014-05-14T12:31:00.003-07:002014-05-14T12:32:17.830-07:00Tax whistleblower news summary for week of May 12<div class="MsoNormal">
Credit Suisse, which has been under investigation by the
Department of Justice, may pay up to a $2 billion fine to resolve charges of
tax evasion. <a href="http://www.reuters.com/article/2014/05/12/us-creditsuisse-investigation-idUSBREA4B0YP20140512">(Reuters)</a><o:p></o:p></div>
Unknownnoreply@blogger.comtag:blogger.com,1999:blog-4817803886994726107.post-35943466724482225102014-05-09T07:07:00.002-07:002014-05-14T12:32:01.492-07:00Tax whistleblower news summary for week of May 5<div class="MsoNormal">
A former Credit Suisse employee pleaded guilty to helping
wealthy American clients hide untaxed income in Swiss bank accounts. U.S.
authorities continue putting pressure on Credit Suisse to plead guilty to the
same charges. <a href="http://www.reuters.com/article/2014/05/04/credit-suisse-idUSL6N0NQ04C20140504">(Reuters)</a><o:p></o:p></div>
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The IRS is investigating Caterpillar Inc.’s overseas
transactions that saved the company over $2 billion in taxes from 2000 to 2012.
<a href="http://www.bloomberg.com/news/2014-05-02/irs-probing-caterpillar-parts-deals-examined-by-senators.html">(Bloomberg)</a><o:p></o:p></div>
Unknownnoreply@blogger.comtag:blogger.com,1999:blog-4817803886994726107.post-59198597013373062442013-10-28T12:33:00.001-07:002013-10-28T12:37:18.346-07:00Lifetime Achievement Award for whistleblower work given to Mary Louise Cohen<div class="MsoNormal">
The Taxpayers Against Fraud Education Fund honored Phillips
& Cohen partner Mary Louise Cohen with the <a href="http://www.phillipsandcohen.com/P-C-News/Lifetime-Achievement-Award-For-Whistleblower-Work-Given-to-Mary-Louise-Cohen.shtml">Lifetime Achievement Award</a> for
her work on whistleblower cases. <o:p></o:p></div>
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Cohen is responsible for “bringing some of the first and
largest (False Claims Act) cases ever won or settled,” said TAFEF in an announcement
Oct. 24, including a $302 million settlement against Quest Diagnostics. TAFEF called
Cohen a “pioneer of False Claims Act litigation” who brought some of the first “qui
tam” (whistleblower) cases and some of the largest ever won or settled.</div>
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Phillips & Cohen’s cases have helped the government recover
over $11 billion in civil settlements and related criminal fines, making it the
most successful law firm representing whistleblowers in the U.S.</div>
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<o:p></o:p></div>
Unknownnoreply@blogger.comtag:blogger.com,1999:blog-4817803886994726107.post-9418757224661901652013-10-01T14:41:00.000-07:002013-10-01T14:41:08.382-07:00Grassley urges IRS commissioner-nominee to change anti-whistleblower culture<div class="MsoNormal">
Sen. Charles Grassley (R-IA), a
long-time champion of whistleblowers and the creator of the IRS whistleblower
program, has<span class="apple-converted-space"> </span><a href="http://www.grassley.senate.gov/constituents/upload/IRS-Nominee-Grassley-Letter-to-John-Koskinen-9-27-13.pdf">sent a letter</a><span class="apple-converted-space"> </span>to IRS commissioner
nominee, John Koskinen, expressing hope that he will change the
anti-whistleblower culture at the IRS.</div>
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Grassley is concerned that the IRS
whistleblower program is being underutilized and harmed due to the dearth of
whistleblower rewards and IRS agents’ reluctance to “fully utilize the
whistleblower’s knowledge and expertise to identify and expose tax cheats.”<o:p></o:p></div>
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Whistleblowers often put their
careers in jeopardy by coming forward with valuable information. Those who have
filed whistleblower claims or are considering filing<span class="apple-converted-space"> </span><a href="http://www.forbes.com/sites/erikakelton/2013/03/06/irs-uses-the-sequester-to-give-whistleblowers-another-kick-in-the-teeth/">whistleblower claims have been
discouraged</a><span class="apple-converted-space"> </span>by the lack of response from the IRS.<o:p></o:p></div>
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Grassley recommends changes to the
IRS whistleblower program: Assurances that whistleblowers will be valued and
treated fairly, regular use of the awards programs, encouraging rather than
discouraging whistleblowers to come forward, and showing whistleblowers that it
is worth risking their careers to report those who violate or skirt tax laws
and regulations.<o:p></o:p></div>
Unknownnoreply@blogger.comtag:blogger.com,1999:blog-4817803886994726107.post-55991586379048768872013-05-21T14:10:00.001-07:002013-05-21T14:10:38.014-07:00Investment officer goes to prison for creative, fraudulent tax shelter<!--[if gte mso 9]><xml>
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</xml><![endif]-->A Virginia investment firm officer who thought he found a
creative way to defraud the IRS was <a href="http://www.justice.gov/opa/pr/2013/May/13-tax-583.html">sentenced to 54 months in prison</a> yesterday
for implementing a fraudulent tax shelter for KPMG clients.<br />
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Michael Parker, chief operating officer of TransCapital
Corp., promoted and implemented from 1998 through 2006 a tax shelter called the
Sale Leaseback of Tenants Improvements Strategy (SLOTS), ultimately helping
client corporationss to deduct more than $240 million from their corporate
income tax returns.</div>
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Parker, working with others, formed single purpose entities
to buy leasehold improvements from the SLOTS clients. These leasehold
improvements were appraised in such a way to reflect a higher value on the
clients’ books than the sale price. </div>
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Parker admitted that he conspired to defraud the IRS and
withheld information about the transactions from his clients. At least eight
SLOTS shelters were transacted for corporate clients. The Kroger Co. was
identified as having done the largest transaction, claiming over $178 million
in deductions.</div>
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Parker said the SLOTS transactions were simply devices to
conceal financing deals.<span style="mso-spacerun: yes;"> </span>Schemes to
manufacture deductions continue to be a high-risk-shelter strategy.</div>
Unknownnoreply@blogger.comtag:blogger.com,1999:blog-4817803886994726107.post-34372220114862878022013-02-20T13:55:00.000-08:002013-02-20T13:56:36.851-08:00IRS needs to do more to make tax whistleblower program successful<!--[if gte mso 9]><xml>
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Statistics in the Internal Revenue Service’s annual
<a href="http://www.irs.gov/pub/whistleblower/2012%20IRS%20Annual%20Whistleblower%20Report%20to%20Congress_mvw.pdf">report to Congress on the IRS whistleblower program</a> for fiscal year 2012 reflect
whistleblowers’ frustration with the IRS.</div>
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In FY 2012, only 332 whistleblowers submitted information
about tax violations exceeding $2 million – the threshold for the reward
program. That is down from a high of 472 in FY 2009. As <a href="http://www.grassley.senate.gov/news/Article.cfm?customel_dataPageID_1502=44606">Sen. Chuck Grassley(R-IA) noted</a>, “. . . the delay in awards and the way the IRS treats
whistleblowers might be contributing to the leveling off of whistleblower cases.”
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Only five claims have been paid under the tax
whistleblower program Congress created in 2006, the report said. The program
promises whistleblowers rewards of 15 percent to 25 percent of what the IRS
collects based on their information when recoveries exceed $2 million. A Phillips
& Cohen client received <a href="http://www.phillipsandcohen.com/P-C-News/IRS-pays-whistleblower-2-million-reward-for-information-about-alleged-tax-avoidance-scheme-by-Illinois-Tool-Works.shtml">one of the few tax whistleblower rewards made in FY2012 under the previous IRS whistleblower program</a>, which limited rewards to a maximum of
$2 million. </div>
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By creating obstacles to whistleblower rewards and failing
to embrace the whistleblower program, the IRS is missing out on an opportunity
to narrow the $450 billion gap between what is owed in taxes every year, and
what is actually paid. </div>
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It is ultimately the taxpayers and the federal treasury
that will pay for this failure to foster a successful whistleblower
program. If the IRS would do more to give whistleblowers the confidence
to come forward, rather than make it increasingly difficult to receive rewards or
even information about their claims, then the IRS would make substantial
recoveries. </div>
Unknownnoreply@blogger.comtag:blogger.com,1999:blog-4817803886994726107.post-58154762136485908622013-01-31T13:45:00.000-08:002013-01-31T13:46:59.237-08:00Grassley calls for changes in proposed IRS whistleblower regs<!--[if gte mso 9]><xml>
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Sen. Chuck Grassley (R-IA) is disappointed with the
proposed regulations for the <a href="http://www.phillipsandcohen.com/Tax-Whistleblowers/Tax-Whistleblower-Information.shtml">IRS whistleblower program</a>, he told the Treasury Department
and the Internal Revenue Service in a <a href="http://www.grassley.senate.gov/about/upload/WB-Regs.pdf">recent letter</a>. He believes -- as do we --
that the new regulations fail to realize the full potential for recoveries
under the whistleblower program.</div>
<div class="MsoNoSpacing">
<br /></div>
<div class="MsoNoSpacing">
Grassley said the <span style="mso-spacerun: yes;"> </span>IRS whistleblower program should be designed
to encourage whistleblowers to come forward and to mobilize their own resources,
much like the successful False Claims Act.</div>
<div class="MsoNoSpacing">
<br /></div>
<div class="MsoNoSpacing">
Instead the proposed IRS regulations, if adopted, are
likely to discourage whistleblowers. They narrow the definition of the kinds of
recoveries that are eligible for reward, exclude certain kinds of recoveries
altogether and <span style="mso-spacerun: yes;"> </span>broadly define the
limitation for “planners and initiators” of the fraud. The latter, Grassley
fears, could be used to “arbitrarily reduce awards to whistleblowers.” The law
is intended to reward whistleblowers; limiting the scope of eligible recoveries
is at odds with that goal.</div>
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<br /></div>
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The proposed regulations do little to address one of the
chief sources of complaints about the program: the lack of communication
between the IRS and whistleblowers. Grassley also said “the IRS should
establish regulations for utilizing its contract authority” so that the IRS can
use whistleblowers and their counsels and resources to assist in the recovery
of funds, much like the way the Justice Department does in False Claims Act cases.</div>
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<br /></div>
<div class="MsoNoSpacing">
In the early years of the False Claims Act, there were similar
problems. But those were overcome, and it is now the federal government’s most
successful anti-fraud program The IRS whistleblower program could follow a
similar path if the agencies draw on the experience and advice of people like Grassley
when they draft the final regulations.<span style="mso-spacerun: yes;"> </span></div>
Unknownnoreply@blogger.comtag:blogger.com,1999:blog-4817803886994726107.post-33172744534458885982012-10-02T08:15:00.001-07:002012-10-02T08:16:25.403-07:00Former IRS employee outs whistleblower<!--[if gte mso 9]><xml>
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<span style="font-family: inherit;">The arrest
last week of former IRS employee Dennis Lerner stands out for a particular
reason to Taxfraudblog.com: The government said he had revealed the identity of
an IRS whistleblower.<o:p></o:p></span></div>
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<span style="font-family: inherit;"><br /></span></div>
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<span style="font-family: inherit;">Such a breach
of whistleblower confidentiality by a government employee is
unprecedented. As Special Agent Robert
O’Malley of the Office of the Treasury Inspector General for Tax Administration
(TIGTA) said, “A<span style="background-color: white;">ny allegation of corruption, self-dealing, or
inappropriate disclosure of confidential information is a potential violation
of the public trust and could erode the public’s confidence in the American
system of tax administration.”<span style="color: #242424;"><o:p></o:p></span></span></span></div>
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<span style="font-family: inherit;"><br /></span></div>
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<span style="font-family: inherit;">Lerner was charged
with breaching conflict of interest laws and illegally divulging privileged IRS
information. <o:p></o:p></span></div>
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<span style="font-family: inherit;"><br /></span></div>
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<span style="font-family: inherit;">He worked as
an international examiner for the New York IRS office from 2010 to 2011, during
which time he headed the audit of an international bank that was launched on the
basis of whistleblower information regarding nearly $1 billion in unreported
income. Lerner left the IRS in the fall
of 2011 and went to work for the same bank he had audited while at the IRS,
which the New York Times reported was German Commerzbank. <o:p></o:p></span></div>
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<span style="font-family: inherit;">While working
for the bank, Lerner continued to unethically seek out information regarding
the IRS investigation, and revealed the identity of the whistleblower to his
new employer, violating IRS whistleblower confidentiality, according to the
government. <o:p></o:p></span></div>
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<span style="font-family: inherit;"><br /></span></div>
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<span style="font-family: inherit;"><span style="background-color: white; color: #242424;">For more information on whistleblower protection and IRS
whistleblower rules, see </span><a href="http://www.phillipsandcohen.com/Tax-Whistleblowers/Tax-Whistleblower-Information.shtml"><span style="background-color: white;">here</span></a><span style="background-color: white; color: #242424;">. </span></span><span style="font-size: 11.5pt;"><o:p></o:p></span></div>
<!--EndFragment-->Unknownnoreply@blogger.comtag:blogger.com,1999:blog-4817803886994726107.post-3073356218087236792012-09-13T09:11:00.000-07:002012-09-13T09:14:52.856-07:00IRS awards UBS whistleblower $104 million<!--[if gte mso 9]><xml>
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<span style="font-family: inherit;">The IRS awarded
$104 million to UBS whistleblower Bradley Birkenfeld Tuesday. In 2007 Birkenfeld played a key role in
alerting the U.S. government to the ways the Swiss bank, UBS, was encouraging
clients to evade taxes in the U.S. Following
Birkenfeld’s tip, UBS agreed to a $780 million settlement with the Department
of Justice, and turned over information on some 5,000 Swiss accounts to the
IRS. <o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;">Largely as
a result of Birkenfeld’s cooperation and the subsequent investigation of
several Swiss banks, the IRS launched its first Offshore Voluntary Disclosure
Program in 2009. Over 33,000 Americans
have since participated in the program and the IRS has recouped approximately
$5 billion in back taxes and penalties. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: inherit;">Such a
substantial whistleblower reward recognizes the value of Birkenfeld’s
contributions to the IRS investigation. <a href="http://www.phillipsandcohen.com/Attorneys/Erika-A-Kelton.shtml">ErikaKelton</a>, a whistleblower attorney at Phillips & Cohen LLP,
noted the significance of the reward in a <a href="http://www.bloomberg.com/news/2012-09-11/ubs-whistle-blower-birkenfeld-secures-irs-award-lawyers-say.html">Bloomberg article</a>. Kelton said, “The<span style="background-color: white;"> government
acknowledged that without him or someone in his position, offshore evasion at
UBS would still likely be going on.” <o:p></o:p></span></span></div>
<div class="MsoNormal">
<br /></div>
<span style="background-color: white;"><span style="font-family: inherit;">Kelton also noted that
although the record of <a href="http://www.phillipsandcohen.com/Tax-Whistleblowers/Tax-Whistleblower-Information.shtml">IRS whistleblower program</a> has been discouraging for the past few years, Birkenfeld’s
reward bodes well for the momentum of the program. “This is a powerful statement that things are
moving and whistleblowers are welcome and they’re open for business,” said
Kelton. </span></span><!--EndFragment-->Unknownnoreply@blogger.comtag:blogger.com,1999:blog-4817803886994726107.post-62924663013226151912012-08-31T10:00:00.000-07:002012-08-31T10:00:53.168-07:00Despite landmark financial penalties in the recent <a href="http://www.phillipsandcohen.com/P-C-News/Whistleblowers-played-major-role-in-Glaxo-case-leading-to-Glaxo-s-record-settlement.shtml">$3 billion GlaxoSmithKline settlement</a>, some maintain that fines are not enough to discourage unethical behavior and malfeasance in corporate conduct. Rather, responsibility must be placed upon individuals in order to effect long-term change. <br />
<br />
A recent <a href="http://www.nytimes.com/2012/07/03/business/glaxosmithkline-agrees-to-pay-3-billion-in-fraud-settlement.html?_r=1&pagewanted=all">New York Times article</a> discusses individual criminal prosecution and barring pharmaceutical executives from taking part in Medicaid and Medicare programs as more effective means of reforming the industry. The article states that<br />
<br />
<blockquote class="tr_bq">
"...to institute real change, executives must be prosecuted criminally or barred from participating in the Medicare and Medicaid programs, an action known as 'exclusion.' </blockquote>
<blockquote class="tr_bq">
This has occurred in only a handful of cases, and rarely in a case involving a major pharmaceutical company. In 2011, four executives of the medical device company Synthes were sentenced to less than a year in prison for conducting clinical trials that were not authorized by the Food and Drug Administration." </blockquote>
The GlaxoSmithKline settlement involves a “corporate integrity agreement,” which places emphasis on the role of individual company leaders in illegal activity and punishes their involvement. Part of this agreement is an “executive financial recoupment” program that calls for the withdrawal of bonuses and other financial incentives when executive and/or their employees are found guilty of participating in unethical or illegal behavior. <br />
<br />
<a href="http://www.phillipsandcohen.com/">Phillips & Cohen</a> attorney <a href="http://www.phillipsandcohen.com/Attorneys/Erika-A-Kelton.shtml">Erika Kelton</a>, who represented two key whistleblowers in the Glaxo case, approves of this agreement as a step in the right direction. Kelton says that this “creates pressure and it creates an element of responsibility." <br />
<br />
For more information on the role of whistleblowers in the GlaxoSmithKline settlement, please visit <a href="http://www.glaxowhistleblowers.com/">http://www.glaxowhistleblowers.com/</a>. <br />
<br />Unknownnoreply@blogger.comtag:blogger.com,1999:blog-4817803886994726107.post-74495331449754372452012-08-03T09:00:00.000-07:002012-08-31T10:00:01.685-07:00European Commission to beef up regulation on tax evasion<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">The European Taxation and Customs Union is expanding <a href="http://drugi.euractiv.com/euro-finance/commission-moves-clamp-tax-evasi-news-514200">efforts to crack down on tax evasion and fraud</a></span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">. The plan includes measures to assess the efficacy of regulatory bodies already in place, increase communication within the monitory network, Eurofisc, and implement standardized minimum penalties for tax related infractions, according to a recent memo released by the Commission.</span><br />
<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"><br /></span>
<span class="Apple-style-span" style="background-color: white; font-family: Times, 'Times New Roman', serif; line-height: 17px;">The <a href="http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/12/609&format=HTML&aged=0&language=en&guiLanguage=en">EU Taxation and Customs Union memo</a></span><span class="Apple-style-span" style="background-color: white; font-family: Times, 'Times New Roman', serif; line-height: 17px;"> also noted that efforts should encourage tax compliance, though offered no specific strategy to do so.</span><br />
<span class="Apple-style-span" style="background-color: white; font-family: Times, 'Times New Roman', serif; line-height: 17px;"> </span><br />
<span class="Apple-style-span" style="background-color: white; font-family: Times, 'Times New Roman', serif; line-height: 17px;">EU member countries would benefit from adopting whistleblower programs that reward and protect whistleblowers, similar to those in the U.S. The U.S. has four major whistleblower programs: one handled primarily by the Justice Department, and more recent ones with the Internal Revenue Service, the Securities and Exchange Commission and the Commodity Futures Trading Commission. These programs have been critical tools to fight tax fraud in the United States. </span>Unknownnoreply@blogger.comtag:blogger.com,1999:blog-4817803886994726107.post-78252293422537900302012-08-02T17:54:00.001-07:002012-08-31T09:58:55.370-07:00IRS unable to collect payments from Medicaid providers who owe taxesDespite owing approximately $791 million in unpaid federal taxes, about 7,000 health care providers in New York, Florida and Texas have collected millions of dollars in Medicaid reimbursements in the past two years, according to a <a href="http://www.gao.gov/products/GAO-12-857">report released this morning</a> by the U.S. Government Accountability Office. Because Medicaid reimbursements are channeled through state programs, they are not considered federal money, and therefore cannot be levied (seized or stopped) by the IRS in order to off-set taxes owed to the federal government.<br />
<br />
Under the <a href="http://www.gpo.gov/fdsys/pkg/BILLS-111hr1enr/pdf/BILLS-111hr1enr.pdf">American Recovery and Reinvestment Act</a>, health care providers may apply for Medicaid funding whether or not they owe federal taxes. Critics recommend implementing stricter requirements for obtaining Medicaid funding from the government, while others claim that such restrictions might <a href="http://www.washingtonpost.com/politics/health_care/govt-report-no-clear-way-for-irs-to-block-medicaid-payments-to-providers-who-cheat-on-taxes/2012/08/02/gJQAFVT0QX_story.html">discourage upstanding providers from seeking participation</a> in the program, according to the Washington Post.<br />
<br />
The GAO report recommended the IRS review its policies for collecting taxes and find more efficient ways to obtain owed funds from Medicaid providers. <br />
<br />
One of the most successful ways the government recovers money lost to fraud is through whistleblowers, who have helped the U.S. reclaim about $30 billion. However, the <a href="http://www.forbes.com/sites/erikakelton/2012/03/02/irs-whistleblowers-see-little-reward/">IRS has yet to take full advantage of its whistleblower program</a>, according to attorney <a href="http://www.irswhistleblowerlawyers.com/index.php/site/section/C5/directory_of_attorneys/erika_a._kelton">Erika Kelton</a>, and would do well to explore the potential of that program.<br />
<br />
<i> </i><i> </i>Unknownnoreply@blogger.comtag:blogger.com,1999:blog-4817803886994726107.post-57072175276147900882012-07-26T08:24:00.000-07:002012-08-31T09:57:33.780-07:00IRS needs to do its job and revoke tax-exempt status of lobbying groups<br />
<div class="MsoNoSpacing">
A recent effort in Congress to require <a href="http://www.nytimes.com/2012/07/17/us/politics/hope-growth-and-opportunity-shows-limits-of-disclosure-rules.html">more
accountability of independent political groups</a> that have non-profit,
tax-exempt status recently failed. But the Internal Revenue Service (IRS) has
all the tools needed, including a strong whistleblower program, to crack down
on the flaunting of tax rules by political lobbying organizations that claim
nonprofit, tax-exempt status.<o:p></o:p></div>
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<br /></div>
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The reason legislative solutions are being proposed is
that the IRS has failed to do its job, allowing thinly veiled fronts to raise
funds using their tax-exempt status, then use those funds to engage in
political lobbying. <o:p></o:p></div>
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In what is apparently the first action of its kind against
a political, tax-exempt organization, Phillips & Cohen LLP filed on behalf
of Common Cause <a href="http://www.phillipsandcohen.com/P-C-News/Phillips-Cohen-represent-Common-Cause-in-IRS-whistleblower-case-against-ALEC.shtml">a
whistleblower claim with the IRS against the American Legislative Exchange
Council</a> (ALEC) asserting that it is a lobbying organization masquerading as
a “public charity.” If the IRS were to enforce its rules, perhaps more
whistleblowers would come forward and provide key information to stop such
violations. <o:p></o:p></div>
Unknownnoreply@blogger.comtag:blogger.com,1999:blog-4817803886994726107.post-57251695896769707192012-01-04T09:16:00.000-08:002012-01-04T09:19:36.949-08:00Swiss bankers sought tax-evading U.S. clients, government alleges<!--[if gte mso 9]><xml> <o:officedocumentsettings> <o:allowpng/> </o:OfficeDocumentSettings> </xml><![endif]--><!--[if gte mso 9]><xml> <w:worddocument> <w:view>Normal</w:View> <w:zoom>0</w:Zoom> <w:trackmoves/> <w:trackformatting/> <w:punctuationkerning/> <w:validateagainstschemas/> <w:saveifxmlinvalid>false</w:SaveIfXMLInvalid> <w:ignoremixedcontent>false</w:IgnoreMixedContent> <w:alwaysshowplaceholdertext>false</w:AlwaysShowPlaceholderText> <w:donotpromoteqf/> <w:lidthemeother>EN-US</w:LidThemeOther> <w:lidthemeasian>X-NONE</w:LidThemeAsian> <w:lidthemecomplexscript>X-NONE</w:LidThemeComplexScript> <w:compatibility> <w:breakwrappedtables/> <w:snaptogridincell/> <w:wraptextwithpunct/> <w:useasianbreakrules/> <w:dontgrowautofit/> <w:splitpgbreakandparamark/> 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mso-para-margin-left:0in; line-height:115%; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi;} </style> <![endif]--> <p class="MsoNormal">The U.S. Attorney’s Office in Manhattan has charged three Swiss bankers -- who sought to scoop up former UBS clients -- with conspiring to hide more than $1.2 billion in assets for U.S. clients from the Internal Revenue Service (IRS).</p> <p class="MsoNormal"><a href="http://www.justice.gov/usao/nys/pressreleases/January12/berlinkafreiandkellerindictmentpr.pdf">The indictment of the Swiss bankers</a> lays out a simple business plan: The three bankers – Michael Berlinka, Urs<span style="mso-spacerun:yes"> </span>Frei and Roger Keller – wanted to capitalize on the IRS investigation of Swiss bank UBS and another large international Swiss bank. To capture the business of those fleeing UBS and the other bank, they allegedly told U.S. clients that their bank wouldn’t disclose its clients’ identities to the U.S. because it had a long tradition of bank secrecy and “was less vulnerable to United States law enforcement pressure because, unlike UBS, the bank did not have offices outside Switzerland,” the indictment says.</p> <p class="MsoNormal">The indictment doesn’t identify the bank Berlinka, Frei and Keller worked for, but <a href="http://www.reuters.com/article/2012/01/03/us-tax-swiss-charges-idUSTRE8021X920120103">Reuters reported they worked for Wegelin & Co.</a>, one of Switzerland’s oldest private banks. </p>Unknownnoreply@blogger.comtag:blogger.com,1999:blog-4817803886994726107.post-86900190122345332842011-11-21T12:13:00.000-08:002011-11-21T12:57:32.696-08:00Billionaires avoid more than just income taxBillionaires can pull millions out of appreciated assets in ways that<a href="http://www.bloomberg.com/news/2011-11-21/billionaires-duck-buffett-17-tax-target-avoiding-reporting-cash-to-irs.html#"> allow them to avoid taxes</a> on that cash without violating any IRS rules, reports Jesse Drucker of Bloomberg News.<br /><br />The ability to avoid those taxes is an overlooked aspect of the debate over whether to increase the income tax that the wealthiest people in the U.S. should pay, the story notes.<br /><br />“The problem is not that people like Warren Buffett pay tax at a 17 percent rate, it’s that they can use complex transactions not available to most Americans to get cash from their appreciated stock without paying any taxes at all,” said David S. Miller, a tax attorney and former chair of the tax section of the New York State Bar Association.Unknownnoreply@blogger.comtag:blogger.com,1999:blog-4817803886994726107.post-50029794950760582792011-11-02T12:19:00.000-07:002011-11-02T12:40:14.613-07:00G-20 countries should consider whistleblowers to help stop tax evasionMany countries are trying to <a href="http://www.nytimes.com/2011/11/03/business/global/tax-evaders-face-greater-scrutiny-as-national-debts-pile-up.html?_r=1&src=tp">crack down on tax evasion</a> as a way to increase revenues. But they are overlooking a powerful weapon: whistleblowers.<br /><br />Tax evasion and compliance is on the agenda of the group of 20 countries this week. Only the U.S. has a program to reward whistleblowers for reporting tax evasion or other tax law violations. The <a href="http://www.phillipsandcohen.com/Tax-Whistleblowers/Tax-Whistleblower-Information.shtml">Internal Revenue Service will reward whistleblowers</a> 15 percent to 30 percent of funds recovered as a result of the whistleblower's information and help if the amount exceeds $2 million, including tax, penalties and interest.<br /><br />The U.K. took a major step this week to encourage whistleblowers with information about financial crime. <a href="http://uk.reuters.com/article/2011/11/01/uk-sfo-whistleblowing-idUKTRE7A02ZM20111101">The Serious Fraud Office set up a whistleblower hotline</a> and said it protect the whistleblower's identity.Unknownnoreply@blogger.comtag:blogger.com,1999:blog-4817803886994726107.post-16788352324198638632011-08-04T14:39:00.000-07:002011-08-04T14:41:13.652-07:00California offers amnesty for investors in abusive tax shelters<div>California has launched a <a href="http://www.ftb.ca.gov/Voluntary_Compliance_Initiative_2/index.shtml?WT.mc_id=HP_Feature_VCI2_Hed#eligibility">tax amnesty program</a> for people who used abusive tax shelters or offshore financial arrangements to evade or avoid state taxes.</div><div><br /></div><div>The California Franchise Tax Board announced the initiative, called “Voluntary Compliance Initiative 2,” earlier this week. Participants in the program can avoid most penalties and criminal prosecution, the tax board says. The filing period for the amnesty program ends Oct. 31.</div><div><br /></div><div>The San Francisco Chronicle reports that the <a href="http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/08/04/BUCR1KITC2.DTL&type=business">tax board has contacted 47,000 taxpayers</a> who might be eligible.</div><div><br /></div>Unknownnoreply@blogger.com