I.R.S. Bounty Hunters

Bob Bauman (March 19, 2010)

In December 2006, the IRS got a powerful tool in their ongoing efforts to collect taxes from unwilling taxpayers. The kind of tool that could turn virtually anyone into an eager informant…

The IRS “Whistle Blower Program” provides that individuals who report substantial tax violations (at least $2 million in tax owed) have a legal right to receive rewards of 15% to 30% of the amount the government collects.

One such informant from a few months back was former UBS bank employee Bradley Birkenfeld, (below right). Bradley was sentenced to 40 months in prison for facilitating offshore tax evasion through UBS banking schemes.

He got hard time even though he assisted federal investigators in exposing the bank’s tax frauds…

Just before he was sentenced Birkenfeld appeared on CBS “60 Minutes” on January 4, 2010 as part of his PR campaign to avoid prison. Even as the prison doors closed behind him, he was still protesting that this was no way for the IRS to treat their major UBS tax rat.

Not many people know of Birkenfeld.

Nevertheless, he was the key player in the UBS scandal, the American inside banker who gave up all the information the IRS needed to make its case against UBS…and, sadly, against Swiss banking secrecy in general.

Unfortunately for him, he failed to rat on one of his own UBS clients who later cooperated with the IRS and admitted Birkenfeld’s part in helping him evade taxes – thus Brad got prison instead of the probation he felt he had earned by turning in others.

Birkenfeld’s Millions

More interestingly, most folks don’t know that Birkenfeld has filed a claim under the IRS “Whistle Blower Rewards Program”. One report says his claim is for US$34 million, roughly 30% by his calculations of what UBS clients may have to pay the IRS.

Thus, there is big money to be made in “outing” tax cheats.

No doubt, the fact that Birkenfeld got jail time instead of probation may dampen the enthusiasm of other whistle blowers who may have been involved in the tax offense they report.

But there are always those who have no direct involvement in the tax fraud – ex-spouses, former business partners, disgruntled employees who know where the cash is stashed.
Under the IRS informant system even in criminal tax cases, the identity of the informant remains completely anonymous and will never be revealed to the taxpayer being prosecuted.
So a word to the wise for the wealthy: file and pay your U.S. taxes as required by law – and be very careful about those you hire or assigned to handle your financial affairs – even your banker. Extreme due diligence is in order.

Sincerely,

Bob Bauman,

Legal Counsel for The Sovereign Society

P.S. A limited pool of Sovereign Individuals will get the chance to hear insights from Bob and the whole Council of Experts firsthand at this year’s Total Wealth Symposium. Click here to join them…