|By PR Newswire||
|October 26, 2012 06:09 PM EDT||
WASHINGTON, Oct. 26, 2012 /PRNewswire/ -- The Ferraro Law Firm announced today that the Internal Revenue Service ("IRS") has awarded $38 million to one of its clients for providing information about a tax avoidance scheme perpetrated by one of the nation's largest corporations. "Both the name of the company and the name of the whistleblower have remained completely confidential throughout this whole process, and remain so even after payment of this award, so this large payment by the IRS proves that their program can reward corporate whistleblowers without putting themselves and their jobs at risk," said Scott Knott, a Tax Partner at The Ferraro Law Firm. While the precise amount of the award was $38,037,899, the amount of tax the IRS collected from the company was not revealed. However, by law, the IRS must pay an award of between 15 to 30 percent of the amount it collected from the tax whistleblower.
Gregory Lynam, also a Tax Partner at the firm, said, "The target corporation doesn't even know that it had a whistleblower, and they should never know, because the IRS did not inform the taxpayer that they had help from us on the sophisticated tax issues involved in this case." The company was in the top half of the annual Ferraro 500 list, which reorders the Fortune 500 companies based on the size of those companies' Uncertain Tax Positions (see http://www.tax-whistleblower.com/ferraro500/), but pursuant to confidentiality laws the IRS will not identify the taxpayer. Lynam added, "It is routine for companies in the top half of the Ferraro 500 to have set aside reserves of hundreds of millions or even billions of dollars for tax issues that it thinks the IRS would win if they were challenged."
Through detailed submissions to the IRS Whistleblower Office, The Ferraro Law Firm has brought to the government's attention taxpayers who have collectively underpaid their taxes by more than $100 billion. "We're not authorized to comment on the specifics of the tax issues that led to this $38 million award, but we can say that they were more akin to aggressive corporate tax planning than outright fraud, and the tax adjustments the IRS made were commensurate with the factual and legal allegations we made in our submission to the IRS," said Lynam.
Shortly after the IRS established the Whistleblower Office in 2007, Knott and Lynam joined The Ferraro Law Firm from prominent Washington D.C. tax practices - having previously represented some of the world's largest companies and wealthiest individuals - to focus exclusively on tax whistleblower cases. This particular award was paid out on one of the first cases they filed. "The IRS can take as much as 5 to 7 years on average to work up one of these cases, so it is certainly a source of frustration from many whistleblowers that it takes so long," said Knott, "but if you can persuade the IRS to act on your information, you have an opportunity to be awarded for that. However, there are many hurdles to clear." For more information on The Ferraro Law Firm's tax group and tax whistleblower submissions, call 1-800-275-3332 or visit www.tax-whistleblower.com.
SOURCE The Ferraro Law Firm