Do I need a Whistleblower attorney?

Under certain circumstances, the IRS and SEC/CFTC whistleblower programs allow whistleblowers to proceed without an attorney. However, beacuse there are important considerations when deciding how to proceed, it is advisable to contact an experienced whistleblower attorney.

How to Report Tax Fraud

Tax whistleblower claims can raise complex legal and accounting issues that require the assistance of an experienced whistleblower attorney to ensure that you maximize your tax reward. Because of manpower constraints, the IRS does not act on the majority of whistleblower claims submitted to them. It is therefore important that your initial and subsequent submissions to the IRS be thorough and compelling. Our firm will provide a free case evaluation of your claim as part of this process.

The IRS evaluates the following criteria when determining whether to pursue your case:

  • The amount of tax underpayment
  • The quality of proof presented as part of your tax whistleblower claim Whether the claim involves allegations of tax fraud which can extend the applicable statute of limitations and lead to additional civil and criminal penalties
  • Whether the claim is timely filed, i.e., whether any statute of limitations applies to the claim thereby barring the IRS from collecting on the claim
  • Whether any legal or accounting privileges bar the IRS from using the information submitted to the IRS as part of the claim
  • How sound are the legal and accounting analyses submitted in support of your claim

Our lawyers will work with you to obtain as much evidence as possible before submitting your claim to the IRS, and we will help organize your evidence into a compelling narrative which clearly demonstrates the nature and extent of the underpayment. At K&M, we employ a former Revenue Agent and a former federal criminal tax prosecutor who can prepare your evidence in the proper manner as well as perform all the necessary legal and accounting analyses.

The IRS Whistleblower Claim Process

There are several steps in the tax whistleblower claim process:

  • Preliminary assessment by the IRS Whistleblower Office as to whether the claim is viable
  • Analysis by the IRS General Counsel Office of any legal issues, including privilege issues, raised by the submission of the claim
  • Assignment of the claim to the appropriate IRS audit team
  • IRS audit and investigation
  • Determination and collection of the tax underpayment and penalties and interest
  • Determination of the reward amount by the Tax Whistleblower’s Office
  • An appeal to the United States Tax Court of the award if appropriate

Each of the steps can take months, and in some cases years, to complete. Your counsel should be prepared to assist you and the IRS in each of the steps. Your counsel’s analysis of any applicable privilege issues can be critical in determining whether the IRS decides to proceed or decline your claim.

Criminal Referral of the Claim

If the IRS Whistleblower Office determines upon its initial review that the claim raises criminal issues, the claim will be referred to the Criminal Division of the IRS for review and if appropriate, an investigation. If there is a criminal referral, the criminal investigation will take precedence over the civil audit process. The civil audit process will not be conducted until the criminal investigation is completed. The IRS may seek the assistance of the whistleblower during its criminal investigation. Whistleblower counsel should be familiar with criminal investigations to properly advise the whistleblower of all ramifications of a criminal investigation and to properly assist the IRS in its investigation. Kenney & McCafferty has experience in all aspects of the Claims process, including criminal tax matters. Our firm has counsel with experience as a federal criminal prosecutor, and we employ a former IRS Revenue Agent who often testifies as an expert in criminal tax cases.

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