Be Careful Who You Trust - They May Decide to be an IRS Informant for a Big Reward

The IRS has a Whistle Blower program which often makes those who participate wealthy.  The reward paid by the IRS can be up to 30% of the tax collected.   It is much like the Cold War Russia where they wanted everyone to inform on their friends and family. Rewards have been paid to foreign bankers who have turned in their own clients......so much for secret bank accounts.

In 2010 7,577 Cases were submitted and the IRS paid out over $18 million in rewards. The information received from Whistle blowers results in collection of more than $464 million in taxes.  Often it is wise to have an attorney represent you if you decide to inform on another taxpayer to protect your interests. Read more about the program HERE.

Enron Whistleblower Scores $1.1M Reward from IRS

The Internal Revenue Service has paid a $1.1 million reward to an anonymous whistleblower for information that exposed an alleged tax fraud scheme by Enron, Bankers Trust and others before the company collapsed. Many of these schemes involved use of offshore accounts and entities to avoid US taxation.

It is one of the few whistleblower rewards the new IRS Whistleblower Office has made since Congress created the IRS Whistleblower Office and a new tax whistleblower program in 2006. The IRS made the award under the previous whistleblower program (known as the IRS 211 program), which allowed the IRS to award whistleblowers nothing or up to 15 percent of the tax funds the IRS recovered as a result of the whistleblower’s information.

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. 

This same program is being used to catch expatriates living and working abroad with unreported foreign income and assets.  Your foreign banker, investments advisor, friend, neighbor or accountant can decide it is more profitable to turn you in to the IRS, than to remain loyal to you. Be careful out there!