IRS whistleblower reward of nearly $20 million goes to P&C client

WASHINGTON, DC, Dec. 23, 2013 -- The Internal Revenue Service has made a whistleblower reward to a client of Phillips & Cohen totaling nearly $20 million for whistleblower claims that exposed a number of abusive tax shelters involving billions of dollars.

The IRS whistleblower reward is among the largest IRS rewards that have been publicly announced. Phillips & Cohen's client chooses to remain anonymous to protect his professional prospects.

Phillips & Cohen's client filed his claims before 2006, which is when the current IRS whistleblower program was established. Under the agency's current policy, the IRS waits to make whistleblower rewards until the offending taxpayer has exhausted all appeals and paid the taxes and fines owed.

Under the older IRS whistleblower reward program, the IRS could award a whistleblower nothing with no recourse for the whistleblower to appeal. The new IRS whistleblower reward program rewards whistleblowers with 15 percent to 30 percent of the amount recovered in cases where the fraud causes a loss to the US Treasury of more than $2 million.

"It's heartening that the IRS has paid our whistleblower client a reward," said Erika A. Kelton, a whistleblower attorney with Phillips & Cohen. "But it's unfortunate that it took so long. Hopefully, the IRS will accelerate the pace of whistleblower award payments."

The award announced today is the fourth IRS whistleblower reward a Phillips & Cohen client has received.