Snitches Get Stitches. And a Cool $100 Million.
From Bloomberg:
Bradley Birkenfeld, the former UBS AG banker who told the Internal Revenue Service how the bank helped thousands of Americans evade taxes, secured an IRS award of $104 million, an amount his lawyers said may be the largest ever for an individual U.S. whistle-blower.
It was Berkenfeldwho ultimately undid an elaborate UBS plan to come to the U.S. in search of wealthy Americans, manage their assets, and help them cheat the IRS:
Birkenfeld’s disclosures preceded UBS’s decision to pay $780 million to avoid prosecution, admit it fostered tax evasion from 2000 to 2007 and turn over data on 250 Swiss accounts. UBS later agreed to provide information on another 4,450 accounts. Since then, at least 33,000 Americans have voluntarily disclosed offshore accounts to the IRS, generating more than $5 billion.
The payout didn’t come without sacrifice, however, as Birkenfeldhad previously plead guilty to conspiracy in 2008, a year after blowing the whistle on UBS, and was only recently released from rich-white-guy-prison. Of course, to put things in perspective, I would sign up for a few years in minimum security prison today if it even harbored the possibility of walking away with $100 mill. Sailing…croquet tournaments….karaoke night hosted by Bernie Madoff; it’s not a bad way to kill a few years if the GDP of Costa Rica is waiting for you on the other end.
Dollar amountsaside, the newsworthy aspect of the story is that this is the first major award issued under the IRS whistle-blower law, and given the size of the payout, it’s sure to give other money-hungry traitors Good Samaritans all the motivation they need to come forward and sing like canaries about their employer’s shady tax undertakings.
“The IRS sent 104 million messages to whistle-blowers around the world — that there is now a safe and secure way to report tax fraud,” Birkenfeld’s attorney Stephen M. Kohn said today at a news conference in Washington.
This is indeed a positive step forward for the Service’s whistle-blower program, which has come under criticism in recent months for the length of time necessary to process claims and what has been perceived as unjust rejection of award claims. The program was created in 2006 to boost tax revenue by providing incentive to tipsters, but over the past five years, many of the 1,300 filed claims — rumored to have alleged total tax underpayments of $2.6 billion — have gone unaddressed.
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