IRS WHISTLEBLOWER SETTLEMENT

On September 11, 2012, Swiss banker Bradley Birkenfeld announced that the IRS will pay him $104 million as a whistleblower reward for the information he provided to the U.S. government. Under the IRS whistleblower program, informants are entitled to a percentage of the dollar amount recovered by the U.S. government when fraud is exposed. The information supplied by Birkenfeld uncovered a secretive private wealth management division of the Swiss Bank UBS. This division of UBS would help U.S. clients evade taxes by hiding their wealth overseas. Birkenfeld’s information eventually led to the recovery of a $780 million fine paid by UBS to the U.S. and the names of 35,000 taxpayers who held illegal offshore accounts, which resulted in over $5 billion dollars in back taxes, fines and penalties. The IRS whistleblower program can potentially pay big dividends to potential informants for turning over information to the U.S. government.