Oct 10, 2012

Get Money: IRS Awards 2 million to tax informant

The Internal Revenue Service has paid $2 million to a Wall Street informant who more than a decade ago tipped off the government to tax-promotion schemes that he claimed involved more than $10 billion in taxable income, the man's lawyers said on October 4th.

It was the third straight award to the man, known only as "Mr. ABC" after the identity he was assigned at a 2004 Senate Finance Committee hearing on abusive tax shelters. During the hearing, the whistleblower had complained that the government was disorganized and ill-equipped to deal with sophisticated tax shelters.

The $2 million award was in connection with a tax strategy at Illinois Tool Works Inc. A spokeswoman for the company declined immediate comment. The law firm representing Mr. ABC, Phillips & Cohen LLP in Washington, said in a statement that the alleged tax avoidance scheme at Illinois Tool Works cost the U.S. Treasury hundreds of millions of dollars. The whisteblower had first shared information with revenue agents in 1999, his lawyers said.

Last year, the same whistleblower received $1.1 million, his lawyers said. In that case, the company involved was Enron Corp., which imploded in 2001 amid an accounting scandal. The informant's lawyers said he had provided information about abusive tax shelters that helped Enron avoid taxes on more than $600 million of taxable income.

The payout was provided under an earlier whistleblower program that generally limited awards to $2 million. A new whistleblower program established in 2006 sets awards at between 15% and 30% of the total proceeds collected, as long as the IRS moves ahead on the information provided.

Get that money!!!

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