Top Tax Evasion Whistleblowers - Jeff Newman Law

Top 2 Tax Evasion Whistleblower Cases

In the US, the Internal Revenue Service (IRS) relies heavily on whistleblowers in order to uncover tax fraud and tax evasion attempts. With the help of these brave individuals, the IRS is able to minimize the possibilities of illegal evasion. Here are some notable whistleblowers in this field.

Bradley Birkenfeld

Who is he?

Birkenfeld was a US banker who, at the time of his collaboration with federal authorities, was serving a sentence of 40 months for – you guessed it – abetting one of his client’s tax evasion.

What did he do?

He disclosed vital information to the US government, which led to an enormous fraud investigation against UBS, the Swiss bank, as well as other banks which have allowed and enabled tax evasion by US taxpayers.

What was the consequence?

In 2009, largely as a direct result of the information he provided the US government with, the Department of Justice reached a deferred prosecution agreement with UBS, resulting in a $780 million fine, in addition to the release of previously confidential information regarding US tax evaders.

For his services and in appreciation for his cooperation, Birkenfeld received a $104 million award from the IRS Whistleblower Office. He was also named 2009 Person of the Year for a non-profit organization that analyzes financial officers and tax accountants called Tax Analyst.

Ultimately, Birkenfeld brought about changes to the global tax system which have helped the government fight tax evasion.

Daniel Schlicksup

Who is he?

Schlicksup is an accountant who had been with the construction equipment production giant, Caterpillar, for 16 years.

What did he do?

He grew frustrated of his bosses doing nothing about an overseas tax arrangement of Caterpillar, which helped illegally avoid paying over $1 billion in taxes. He tried approaching them several times, but his warnings never reached the CEO, Jim Owens.

He sent the IRS a 137 page document explaining and showing how Caterpillar, together with its auditor PricewaterhouseCoopers, crafted a way to transfer billions of profit to Switzerland in order to avoid paying US taxes.

What was the consequence?

The IRS came to find that Caterpillar used an illegal tax strategy, and asked for $2 billion in back taxes and penalties. In 2014, a US Senate investigative committee concluded that the company managed to evade over $8 billion in profit tax.

In March of 2017, there was an IRS raid of the offices of the company, with seizure of equipment. If evidence is found related to “false and misleading financial reports and statements” it is possible that some Caterpillar executives may face jail time.