TWAG Attorneys Zerbe and Kohn Announce $11.9 Million IRS Whistleblower Award

Whistleblower attorneys Dean Zerbe and Stephen M. Kohn, members of the Tax Whistleblower Attorney Group (“TWAG”), are pleased to announce that a joint client – who wishes to remain anonymous – received an IRS whistleblower award of $11.9 million.

The whistleblower provided the IRS with original information that led to an IRS enforcement action against a Fortune 500 company. Thanks to the whistleblower, the IRS recovered tax, penalties and interest of $55 million that was returned to the U.S. Treasury.

“Stephen and I are honored to represent the whistleblower, whose extraordinary knowledge and detailed awareness of the relevant tax laws was critical in the success of this submission” said Dean Zerbe of the law firm of Zerbe, Miller, Fingeret, Frank & Jadav. “The whistleblower was exactly over-the-plate of what the IRS is looking for when it comes to a good whistleblower submission – a knowledgeable, informed, insider with detailed awareness about specific failures to pay tax. The whistleblower was able to provide a blueprint to the IRS about specific instances where the company failed to properly pay tax. Finally, the whistleblower’s information was about failure to pay tax by the corporation that involved open tax years.”

Zerbe and Kohn have jointly represented several tax whistleblowers – including Brad Birkenfeld, the UBS whistleblower who received an award of $104 million from the IRS in 2012. In addition, they successfully represented the whistleblowers in the landmark Tax Court case Whistleblower 21276-13W v. IRS (147 TC 121(2016)) which resulted in a major win for tax whistleblowers with the expansion of the definition of “collected proceeds” to include criminal fines and civil forfeitures for whistleblower awards.

“Today’s award showcases the tremendous value of the IRS Whistleblower Program in helping the IRS go after big corporations that aren’t paying their fair share of taxes. As the IRS looks to address the tax gap, it is key that the IRS recognize and embrace the value of the whistleblower award program,” said Stephen M. Kohn of Kohn, Kohn & Colapinto.

“We are especially pleased that the IRS revisited its earlier decision to provide the whistleblower an award of only 15%,” continued Kohn. “After we provided additional information that highlighted the significant contributions the whistleblower made, the whistleblower office revisited their decision and increased the award percentage to 22%. We applaud the whistleblower office for having the openness to reconsider their original determination and make the right call. Whistleblowers should be heartened that the IRS whistleblower office looked to make the right decision based on the facts.”

Modernized in 2006, the IRS Whistleblower Program has allowed the U.S. to recover over $6.6 billion from wealthy tax cheats and corporations non-compliant with tax law. In recent years, the program has struggled with long delays and decreasing award payouts. Whistleblower advocates like Zerbe and Kohn see reason for optimism, however, with new leadership and an increase in funding.

“Individuals who are thinking about blowing the whistle on tax cheats should be heartened by today’s news – as well as the overall good news from the IRS whistleblower office,” explained Kohn. “The whistleblower office stated recently that its awards for this fiscal year were over $70 million dollars – more than double the previous fiscal year. Dean and I have seen the turnaround on awards first-hand with not only this award today, but also with other awards that our clients are receiving that are in the pipeline for this fiscal year and next. Nothing does more to strengthen the IRS whistleblower program and encourage other whistleblowers to come forward than to make awards.”

“On behalf of our client and ourselves, we very much want to thank the Director of the IRS Whistleblower Office, Mr. John Hinman, for this award for our client as well as Commissioner Werfel for his support of the IRS whistleblower program,” said Zerbe. “A particular special thanks to Mr. Michael Bogazis for his good work and professionalism over several years on this filing as well as Ms. Rebecca Paley and Ms. Dawn Applebaum of the Whistleblower Office for their dedication and diligence in helping to make this award happen. Thanks also to the IRS examiners from LB&I who recognized the benefit of the whistleblower’s information.”

Contact Information

Geoff Schweller

Communications Director

Kohn, Kohn & Colapinto LLP

geoff.schweller@kkc.com