Skip to: Content
Skip to: Site Navigation
Skip to: Search


UBS whistleblower: IRS pays tax cheat informant $104M

UBS whistleblower Bradley Birkenfeld was awarded $104 million by the Internal Revenue Service for providing information about overseas tax cheats. The UBS whistleblower is credited with exposing widespread tax evasion at the Swiss bank and was jailed after cooperating with authorities.

By Stephen OhlemacherAssociated Press / September 11, 2012

Bradley Birkenfeld makes remarks before surrendering to authorities at the Schuylkill County Federal Correctional Institution in Minersville, Pennsylvania in this 2010 file photo. US tax authorities have awarded $104 million to whistleblower Birkenfeld in a major tax fraud case against Swiss bank UBS AG that widened a government crackdown on Americans avoiding taxes in Switzerland, his lawyers said on Tuesday.

Tim Shaffer/Reuters/File

Enlarge

Washington

The U.S. tax agency has awarded a former Swiss banker $104 million for providing information about overseas tax cheats — the largest amount ever awarded by the Internal Revenue Service, lawyers for the whistleblower announced Tuesday.

Skip to next paragraph

Bradley Birkenfeld is credited with exposing widespread tax evasion at Swiss bank UBS AG. Birkenfeld himself served about two-and-a-half years in prison for a fraud conspiracy conviction related to the case, which resulted in a $780 million fine against the bank and an unprecedented agreement requiring UBS to turn over thousands of names of suspected American tax dodgers to the IRS.

"The IRS today sent 104 million messages to whistleblowers around the world — that there is now a safe and secure way to report tax fraud and that the IRS is now paying awards," Birkenfeld's lawyers, Stephen M. Kohn and Dean A. Zerbe, said in a statement. "The IRS also sent 104 million messages to banks around the world — stop enabling tax cheats or you will get caught."

The IRS, which doesn't usually confirm individual award payments, said Birkenfeld signed a disclosure waiver, allowing the agency to confirm his award.

Birkenfeld has become something of a cause celebre among whistleblowers because of the magnitude of his case and the fact that he was jailed after cooperating with authorities. Federal prosecutors had said Birkenfeld withheld information about his own dealings with a former UBS client who pleaded guilty in 2007 to tax charges.

"The comprehensive information provided by the whistleblower was exceptional in both its breadth and depth," the IRS said in a summary of the award provided by Birkenfeld's lawyers.

In 2006, Congress strengthened whistleblower rewards. The law targets high-income tax dodgers, guaranteeing rewards for qualified whistleblowers if the company in question owes a least $2 million in unpaid taxes, interest and penalties.

Some lawmakers, however, have said the IRS has been slow to pay out awards.

"The potential for this program is tremendous, and it's up to the IRS to continue paying rewards and demonstrating to whistleblowers that the process will work and that they will be heard and protected," said Republican Sen. Chuck Grassley, who helped write the law. "An award of $104 million is obviously a great deal of money, but billions of dollars in taxes owed will be collected that otherwise would not have been paid, as a result of the whistleblower information."

  • Weekly review of global news and ideas
  • Balanced, insightful and trustworthy
  • Subscribe in print or digital

Special Offer

 

Doing Good

 

What happens when ordinary people decide to pay it forward? Extraordinary change...

Danny Bent poses at the starting line of the Boston Marathon in Hopkinton, Mass.

After the Boston Marathon bombings, Danny Bent took on a cross-country challenge

The athlete-adventurer co-founded a relay run called One Run for Boston that started in Los Angeles and ended at the marathon finish line to raise funds for victims.

 
 
Become a fan! Follow us! Google+ YouTube See our feeds!