Posts Tagged ‘whistleblowers’

Tax Roundup, 10/5/2012: $2 million to anonymous whistleblower. Plus more debate echoes!

Friday, October 5th, 2012 by Joe Kristan

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Cheating on business taxes just got a little scarier.  CNNMoney reports:

An anonymous Wall Streeter is getting rich exposing alleged tax fraud through the IRS’s whistleblower program.

Washington law firm Phillips & Cohen announced Thursday that its client, a “Wall Street insider,” has netted a $2 million reward from the Internal Revenue Service for exposing an alleged tax-avoidance scheme by manufacturer Illinois Tool Works

This is interesting for many reasons.  The report implies that the whistleblower is in the financial services business.  That could mean banking, investment banking, or even accounting.  That means somebody who knows how to work the whistle could be in your business.

If you can get a million dollars from the IRS and keep your identity secret, it becomes a lot easier to call the IRS.  It also becomes a lot more dangerous for the boss to take flaky tax positions, let alone commit tax crimes; every staff accountant becomes a potential IRS mole.  Because business taxes usually require some staff cooperation, this changes the odds in the tax game in favor of the IRS.

 

Richard Morrison,  Chart of the Day: The Growth of Refundable Tax Credits, 1990-2010. (Tax Policy Blog).

I bet the chart of tax refund fraud incidence would look about the same.

 

More debate fallout:

Christopher Bergin,  Shovel Ready (Tax.com):

And does the President really believe, as he said, that if we bring back the Clinton tax rates we will bring back the Clinton economy? Does he really think we are that naïve?

Clearly, Mitt Romney thinks we are that naïve. He came to the debate loaded with the latest iteration – it seems to change by the day – of his hocus pocus tax reform plan.

Going Concern,  Let’s Try to Make Some Sense of President Obama’s “Tax Breaks for Companies Shipping Jobs Overseas” Statement

Kay Bell,  Romney ‘makes up’ a new, higher tax deduction limit during the debate

Trish McIntire,  Location, Location, Location

Patrick Temple-West,  Essential reading: Fact or fiction in the U.S. presidential debate? and more

 

Anthony Nitti,  Tax Court Has Mercy on Taxpayer’s $16,000,000 Charitable Contribution Deduction

 Brian Strahle,  DC Employers Required to File Annual Use Tax Return by October 20, 2012!

Robert D. Flach,  TAX BLOGOSPHERE BUDDIES – JASON DINESEN

Peter Reilly,  Young Earth Creationists Whipsawed By IRS.  Tax Update coverage here.

 

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1.1 million reasons to stick it to the boss

Wednesday, March 16th, 2011 by Joe Kristan

Maybe you pay that fresh-faced young accountant a fair salary, but if you are cheating on your taxes, the IRS can pay her a lot more. The IRS has just awarded a tipster $1.1 million for blowing the whistle on an Enron tax shelter, according to AccountingToday.
The IRS has dragged its feet in making whistleblower rewards under a new tax whistleblower program enacted in 2006. It’s not clear if this reward is an anomoly, or whether the IRS is ready to start rewarding snitches. Accounting Today reports that this whistleblower is a bit shy:

The whistleblower, a Wall Street banker who has chosen to remain anonymous to protect his job and career, received the maximum reward of 15 percent. The announcement of the reward was made by the law firm that represented him, Phillips & Cohn LLP.

We’ll see whether the whistleblower can maintain his secret identity. Even if he can’t, it the math can look good if you have a big enough pelt to bring into the IRS. If a 25-year old has to choose between his $50,000 staff accountant job at a big firm and a $1.1 million check from the IRS, that career in public accounting could seem pretty disposable.
Update: The TaxProf has more.

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