Internal Revenue Service whistleblower awards surge past $312 million in one year and massive payouts continue to spike

The Internal Revenue Service awarded more than $312 million to whistleblowers last year. This exceeds the previous record of $125 million awarded in 2012. The 2018 rewards, paid in the fiscal year ended Sept. 30, were for additional collected revenue of $1.4 billion, compared with $191 million in fiscal 2017.

And the agency has already paid $115 million to whistleblowers for 2019, and there is more coming. Last year, one tipster alone was awarded $100 million, nearly one-third of the total collected by the government.

To date, the largest known IRS whistleblower award of $104 million went to Bradley Birkenfeld, a former private banker for UBS AG who did go public. His 2012 payment was for turning in the Swiss banking giant, which admitted it encouraged U.S. taxpayers to hide assets abroad.

The spike of recent awards shows the expansion of the IRS’s whistleblower program. The increase is in part due to a favorable 2018 clarification of the law that raised payments in offshore-cheating cases.

Whistleblowers can receive massive awards for reporting corporate cheating, fraudulent gift-and-estate transfers, or cheating by high-net worth individuals.The largest growth area involves reporting offshore cheating, such as by a foreign bank that has assured U.S. officials it has turned over information on all American clients when it hasn’t.