MIAMI, April 8, 2011 /PRNewswire/ -- Yesterday the IRS paid an accountant $4.5 million for uncovering approximately $20 million of tax underpayment by his employer. This award payment is the first of its kind made by the IRS after its Whistleblower Program was revamped pursuant to section 7623(b) of the Internal Revenue Code, which was enacted on December 20, 2006. The news is welcomed by all tax informants who have provided information to the IRS since the doors of the IRS Whistleblower Office opened in Washington, D.C., in early 2007.
"The case that resulted in an award yesterday took over three years to come to fruition, but because of how long it takes the IRS to audit and collect for a tax year, we advise clients that this is typically a 4-7 year process," said Tax Partner Scott A. Knott of The Ferraro Law Firm. "The IRS making good on Congress's promise to pay for valuable information should also reassure potential whistleblowers with high quality information. Now the floodgates will open," said Gregory S. Lynam, also a Tax Partner of the firm. "The IRS could have a hard time handling all of the submissions they are going to receive," said Lynam. "Those who come forward now with information regarding significant tax underpayments are more likely to receive awards than those who wait because awards are given to the informant who first provides the information to the IRS," said Knott.
It is apparent to tax experts that there is a vast amount of possible tax dodging out there that can be the subject of a whistleblower claim. "As shown in the Ferraro 500 list, a reordering of The Fortune 500 by tax reserves, there is approximately $200 billion of uncertain tax positions for those big companies alone," said Lynam. The Government Accounting Office estimated that the "Tax Gap," which is basically the difference between what taxpayers pay and what they really owe in taxes, is as much as $345 billion per year.
The Ferraro Law Firm's Tax Partners Knott and Lynam joined the firm at the end of July, 2007, from prominent Washington, D.C., tax practices to focus exclusively on tax whistleblower cases. The Ferraro Law Firm has over $82 billion in tax whistleblower submissions to the IRS. "This award payment is the first in what should now be a long and continuous flow of awards," said Knott.
For more information on The Ferraro Law Firm's tax group and tax whistleblower submissions, call 1-800-275-3332 or visit www.tax-whistleblower.com.
SOURCE The Ferraro Law Firm