Big Win for Tax Whistleblowers as Pair Gets $17.8 Million

WASHINGTON—The U.S. Tax Court awarded $17.8 million to a pair of whistleblowers in a decision that significantly expands the scope of what can be claimed in such cases. The ruling for the first time allowed the whistleblowers to get a portion of criminal fines and civil forfeitures in addition to part of the taxes the government recouped because of information they provided.

Dean Zerbe, the lead lawyer for the whistleblowers, called the case a “pillar-to-post victory” for his clients and the IRS whistleblower program.

“My real hope is that the IRS and Treasury will take the opportunity with this court decision to swing the doors wide open for whistleblowers to come forward,” said Mr. Zerbe of Zerbe, Fingeret, Frank & Jadav.

The case removes a worry for potential whistleblowers that they would receive less of the proceeds if the IRS chose to pursue a criminal case than if the case were pursued purely to collect owed taxes.

Under the IRS whistleblower program, people who have knowledge of tax violations can file confidential claims with the IRS and get as much as 30% of what the government collects. In fiscal 2015, the IRS paid 99 awards totaling $103.5 million.

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