Tax Whistleblower Statute

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Whistleblowers exist within many different departments of the federal government, and this includes the Internal Revenue Service which is affected by legal statutes. These persons are protected by the law from retaliation, and when communicating through official channels, supervisors are able to protect them in other capacities.

Statutes that affect whistleblowers include those with information that must lead to a judicial or administrative action based on the details provided by the individual. An audit or investigation is usually initiated by this personís info, and an analyst in the Whistleblower Office will make a determination based on what the specific whistleblower provides to a supervisor. Then, based on these details, the IRS must decide if what has been brought forth is worth the action to pursue or if there is not enough and certain specifics are lacking. At that point, the whistleblower may need to garner and collect additional facts.

Some whistleblowers are tasked with gathering a great deal of details due to large corporate taxpayers being audited every year for returns. When these persons are involved, it may lead to an administrative action change based on new issues or problems through the Audit Plan. If an alteration to the way data about the issue is collected or examined, this may be due to the actions of the whistleblower. These employees may also discover how the company has managed to defraud the federal government from thousands in taxes. An entirely new procedure is created in certain instances when the whistleblower has revealed these schemes and scams.

The Audit and Process

When a whistleblower starts delving into the company he or she has been hired for or is connected to the IRS, his or her information may lead to an audit or different process that may reveal secret and hidden assets the company has accumulated through criminal activity. The audit is used to discover where these funds have been moved to. However, the whistleblower may need to investigate further so the methods are discovered. It is then that a new process may be used to determine how a company is able to keep so much revenue and taxable income form the IRS and federal government. While the audit is usually how this occurs, sometimes the process fails.

Sometimes when the business owner is revealed to have initiated illegal transactions or is secreting away income, he or she will cooperate with the IRS to reduce penalties, fees, interest and keep criminal charges away. However, the less he or she cooperates with these processes, the more likely the penalties and consequences will affect his or her life and company. The whistleblower may need to remain in the company for several months collecting and gathering evidence for these transactions. Then, new processes may be created for future investigations for companies that are able to keep such assets secret from the IRS.

The Whistleblower in the Processes

In certain instances, the whistleblower is in on the tax undercuts and revenue hiding schemes. He or she may have been introduced into these procedures by a manager or supervisor, but his or her actions may lead to criminal charges unless he or she is provided immunity in these circumstances. The company or individual affected may have the right to appeal the process, and this could lead to everything the whistleblower accomplished being thrown out the window. The whistleblower and his or
her corresponding offices then are in contact for the final determination in the claim or any criminal or civil charges issued.

These are completed in writing.

The federal tax statues do not protect the whistleblower in instances where he or she has participated in the crimes unless it was or is later exempted through immunity to garner more information and achieve a new process of capturing and discovering such criminals. A supervisor in the offices may need to provide this authorization. Additionally, any other crimes the whistleblower engages in may lead to criminal charges from a federal agency or state authority if revealed. It is vital that any action taken that could lead to incarceration is approved in writing before completed.

Legal Support in Whistleblower Tax Cases

Because some decisions provided by the IRS may not be appeal to the Tax Court, it is important to hire a lawyer if a possible lawsuit or criminal charge is issued based on tax fraud or other crimes. Both whistleblower and company alike need legal representation in these situations. This could prevent costly civil charges and damages owed to the IRS.


Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.

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