Kenney McCafferty Secures Multiple IRS Whistleblower Awards, Assists IRS In Collecting Over $48 Million

PHILADELPHIA, Sept. 14, 2015 /PRNewswire/ -- Philadelphia law firm Kenney & McCafferty ("K&M") proudly announces that the IRS paid significant whistleblower awards in three separate cases to K&M clients under the mandatory IRS Whistleblower Program implemented in 2006. "In each case, our clients alerted the IRS to a sophisticated corporate tax scheme, and their expansive insider evidence and information proved invaluable to the IRS's tax recovery efforts, which collectively netted in excess of $48 million for the U.S. Treasury," said K&M partner Brian McCafferty. 

K&M has represented tax whistleblowers for more than ten years, and has obtained numerous awards for its clients, including under the pre-2006 tax code where the payment of whistleblower awards was purely discretionary. With this recent round of successes, K&M has secured its place among the elite tax whistleblower law firms in the country. In comparison, the IRS paid a mere 11 whistleblower awards under the mandatory award provision through the Fiscal Year ended 2014. 

The IRS Whistleblower Program, as amended in 2006, provides for mandatory, "shall pay" financial awards to whistleblowers whose information substantially contributes to the IRS's detection and recovery of $2 million or more in unpaid taxes, penalties, and interest. The amount of the award ranges from 15 to 30% of the amount the IRS collects, depending upon the extent of the whistleblower's contribution to the investigation. Attorney Tavy Deming is optimistic about recent changes to the program. "Whistleblowers who expose major tax frauds will be paid an award commensurate with the size of the fraud since they receive a percentage of the amount the IRS collects, if threshold criteria are met, in the range of 15 to 30 percent. The Informant's award percentage is increased with the quality and quantity of the knowledge, information and evidence the Informant can provide to the IRS. Of note, in August 2014, the IRS implemented regulations that refine the IRS whistleblower provisions in a predominately positive way, including by enhancing the exchange of information in connection with tax awards," she said.

K&M secured upper limit award percentages for all three clients, with one K&M client receiving the maximum 30% award percentage. A second K&M client received the second largest whistleblower award the IRS has paid to date.  Each of the whistleblowers in these cases has chosen to remain anonymous. Whistleblower anonymity is a key protection afforded in most cases by the IRS Whistleblower Program.

"We have been fortunate to represent clients who not only possess substantial evidence supporting their allegations, but who are also resolute in their efforts to assist the IRS in halting these tax avoidance or tax fraud schemes," commented K&M's Kathryn Schilling, who along with Emily Lambert and Brian McCafferty were intimately involved in securing these outstanding whistleblower award results for the firm's clients.   

Congress enacted the IRS Whistleblower Program as a means to incentivize integrity, and to encourage those who witness tax fraud to step forward and report it. Added Lambert, "The Whistleblower Program advances a significant public interest by incentivizing private citizens to report tax fraud. Without whistleblowers, particularly insiders who possess first-hand knowledge of the tax scheme, to alert IRS agents to major tax fraud and to explain the particulars of the scheme, most tax underpayments go undetected." Deming supplemented, "Tax fraud is rampant. As testament to that fact, the volume of inquiries from potential tax whistleblowers who possess compelling insider evidence of multi-million dollar tax avoidance schemes of all varieties and levels of complexity is as strong as ever. Tax schemes have become increasingly complex, and more skillfully disguised, rendering them impervious to IRS detection absent the cooperation and insights of an insider. In these times of economic uncertainty, government deficits, and a $450 billion tax gap, whistleblowers who assist the IRS in detecting and recovering tax cheats provide a hugely important public service." Schilling added:  "Of particular interest is how the program will be run under the newly appointed director of the IRS Whistleblower Office Lee Martin. His predecessor, Steven Whitlock, was the only person to hold that position since the whistleblower office's inception in 2006."

Although criticism has beleaguered the IRS Whistleblower Program in the past, K&M lawyers foresee that recent developments suggest the logjam is beginning to loosen, paving a bright road ahead for the program. Brian McCafferty, "The most recent awards to K&M clients demonstrate real progress, and indicate a newfound understanding by the IRS that whistleblowers are a valuable weapon in the fight against tax fraud. More importantly, the awards reinforce the notion that integrity matters." 

About Kenney & McCafferty, P.C.:
Kenney & McCafferty is a nationally recognized law firm that has specialized in whistleblower litigation for over a decade, with emphasis on bringing cases under the IRS and SEC whistleblower programs and the False Claims Act. The firm's attorneys and consulting expert, who is a former IRS agent, possess a depth and breadth of skills and expertise that equip the firm to handle even the most complex and demanding whistleblower cases. K&M has achieved exceptional results in whistleblower cases, including a sustained line of record-setting whistleblower settlements. In total, K&M has recovered more than $6.5 billion in damages, penalties, and fines for federal and state treasuries, and secured for its clients hundreds of millions of dollars in whistleblower rewards in connection with these extraordinary settlements. For more information about K&M and K&M's attorneys, please visit the firm's website at http://www.quitam-lawyer.com and http://www.tax-fraud.net.

Additional information about the firm is available at http://www.quitam-lawyer.com and http://www.tax-fraud.net.

SOURCE Kenney & McCafferty, P.C.