Qui Tam

Offshore Tax Evasion and Cayman Islands Hearing Prompts Grassley's Call to Follow IRS Whistleblower Program with Additional IRS Tools

By Finch McCranie, Esq.

At the Senate Finance Committee's hearing on the Cayman Islands and offshore tax evasion last week, Senator Charles Grassley reiterated the importance of the new IRS Whistleblower program to combat tax evasion, but also stressed the need for Congress to provide the IRS greater tools to address offshore tax evasion.

The July 24 hearing focused on GAO's investigation into the Ugland House, a law firm's office building in the Cayman Islands that is the registered address of thousands of corporations. The hearing also examined "U.S. income tax evasion by taxpayers who hide their assets and income in foreign bank accounts and foreign entities."

Sen. Grassley discussed the importance of the IRS Whistleblower program, as he observed that he had "pushed to get legislation passed that would increase rewards for individuals who blew the whistle on tax cheats and created an office at the IRS to coordinate whistleblower claims. These improvements were based on my experience with the False Claims Act that rewards whistleblowers who help the government find fraud in government contracting. This allows the IRS to take better advantage of whistleblower information that is often detailed, inside information. This is information that the IRS may not have otherwise received."

Recognizing some of the results of that effort, Grassley stated that he is "pleased that many at the IRS and Treasury now recognize the benefits of rewarding tax whistleblowers. It is vital that the IRS take full advantage of those who are willing to blow the whistle on tax fraud."

Grassley concluded by stating that he will announce new proposals to fight offshore tax evasion.

In our own discussions with IRS officials about our whistleblower clients, we have already seen 9and written here about) the IRS's great enthusiasm for pursuing offshore tax abuses, involving hedge funds and otherwise. Private citizen whistleblowers are perhaps the best source of information about concealed abuses of the tax laws, which make us all pay more than our fair share of taxes.

We applaud Senator Grassley and the IRS for their resolve on these types of abuses.

Full post as published by Whistleblower Lawyer Blog on July 29, 2008 (boomark / email).