The IRS Whistleblower Office was officially established in 2007 as part of the Tax and Health Care Relief Act of 2006. It was formed to serve as an administrative clearing house between potential informants and the IRS. The amendment also made fundamental changes to the previously existing informant rewards program. Those changes greatly increased both the benefits and incentives in bringing whistleblower claims. Firstly, the amendment mandated payment to a successful whistleblower of between 15 and 30 percent of the funds recovered by the IRS.
The prior law gave much more discretion as to what could be paid, that is, if any rewards would be paid at all. In addition to mandating a greater reward to informants (whom the law sometimes refers to as “relators”), the amendment, for the first time, gave informants important appellate rights to appeal decisions made by the IRS to either deny their claim, or to award a monetary amount the informant deems insufficient. The greater rewards and appeal potential were created as an incentive to those with specific information about tax fraud to come forward with that information and assist in the collection of monies owed. Here, we determined that these amendments also required that any potential relator needed effective, knowledgeable and savvy legal representation to help present a proper claim and further to ensure a fair recovery.
What Happens to a Whistleblower Claim?
Generally speaking, each informant’s claim follows a certain path once it enters the Whistleblower Office clearinghouse in Washington, D.C. All filed claims are initially reviewed to determine whether they meet the criteria. For a relator’s claim to be considered valid, it must;
- Involve an amount of taxes owed that equals or exceeds $2 million dollars; and
- Involve an individual or entity that grosses at least $200,000 in yearly income for the tax year/s in question.
Besides that initial review set, the claim is also screened to determine if it is properly prepared and has substantial merit.
Given limited resources, this initial screening process is not a comprehensive one by the Whistleblower Office. However, it’s the most important and vital step. If a tax whistleblower’s claim does not pass this stage, it will not be brought further and will “die” at the clearinghouse. Knowing this, it was determined that Mininno Law Office whistleblower attorneys and IRS professionals could add significant value to a potential whistleblower claim by expertly, effectively, and properly preparing the claim package before it gets submitted to the clearinghouse.
If, following this intial review, the Whistleblower’s office decides to proceed with the claim, it will then be passed to the Criminal Division of the IRS. There, the claim is screened to determine whether or not there is criminal potential. Again, we determined that a team of lawyers and IRS professionals could add value to the potential whistleblower’s claim by working with the IRS agents to help them determine whether to accept the claim in the criminal division or send it back to the civil unit, where the collection and the reward process benefits the whistleblower. Our professionals have experience working with the criminal whistleblower division and can help provide the necessary information, data, evidence and insight to help expedite the decision process by the IRS at this juncture. Our research shows that less than 10% of claims actually continue on in the criminal division, and of that 10%, less than 1% are actually prosecuted. Therefore, if after our marshalling and analysis of the known evidence, we determine that the chances of the claim being picked up by the criminal division are slim, we will work to have that decision made early in the process so the claim can get to the civil division of the IRS as soon as possible.
Following the criminal divisions’ review outlined above, the claim is sent back to the Whistleblower Office, where it is redirected to either the large business division, or the small business/self-employed division. Our professionals are experienced in advising and guiding the file to ensure it gets to the appropriate division within the IRS.
Once assigned to the proper division and office, that IRS division and office will then proceed with the audit of the taxpayer. Under no circumstances will your identity be revealed by the IRS to the taxpayer in question. The professionals here at the Mininno Law Office have worked with many agents in the Whistelblower’s office and know, first hand, that the agents are absolutely sworn to protect the identity of any Whistleblower. In fact, disclosure is a crime.
The audit process usually takes about a year or so. Our professionals have worked at the IRS on audits over many years and know, first hand, that these investigations can be quite difficult when it comes to the sophisticated, complicated, and fraudulent inner-workings of a large corporation’s financial records. However, we can insist that trained auditors and IRS financial specialists be used to analyze these records to find out exactly how the accused have been monetarily defrauding their government.
Once the assessment is complete, the next step is to collect. This process can also be lengthy. The normal time frame of a whistleblower case is between two and three years.
Why the Mininno Law Office?
Joe Golden’s years of forensic accounting work with the IRS as a field agent, supervisor, and whistleblower liason can expertly and efficiently move a claim through each step of the process outlined above. He and the lawyers at the Mininno Law Office will ensure that the claim is expertly, professionally, and properly prepared. We have spent years working with and learning the culture of the IRS and the lawyers who work with them. This team will use that experience to protect you and ensure that you receive a fair and equitable recovery. We believe in what we do – we believe that all taxpayers should pay their fair share.
If you have information regarding unpaid taxes of an individual or large corporation, fill out an IRS fraud evaluation form. From there, our IRS fraud team will provide you with an initial determination as to whether your potential claim is meritorious and is one that should be investigated by our firm and presented to the IRS.