IRS hands out record whistleblower award

UBS acknowledged that it helped clients avoid U.S. taxes and paid the federal government $780 million in 2008, in order to avoid prosecution.

In all, the banking giant agreed in 2009 to identify about 4,500 Americans suspected of tax evasion. The IRS also has implemented its own offshore disclosure program, which it says has raked in more than $5 billion in back taxes, interest and penalties.

In a finding posted by his lawyers, the IRS said that Birkenfeld, who recently completed a more than two year stint in prison, played a central role in their efforts.

“While the IRS was aware of tax compliance issues related to secret bank accounts in Switzerland and elsewhere, the information provided by the whistleblower formed the basis for unprecedented actions against UBS AG,” the statement read. 

Sen. Chuck GrassleyCharles (Chuck) Ernest GrassleyGrassley: 'Good chance' Senate panel will consider bills to protect Mueller Overnight Finance: CBO to release limited analysis of ObamaCare repeal bill | DOJ investigates Equifax stock sales | House weighs tougher rules for banks dealing with North Korea GOP state lawmakers meet to plan possible constitutional convention MORE (R-Iowa), a former chairman of the Finance Committee and author of 2006 whistleblower legislation, applauded the payout, but also urged the IRS to be more aggressive in its efforts. 

“The potential for this program is tremendous, and it’s up to the IRS to continue paying rewards and demonstrating to whistleblowers that the process will work and that they will be heard and protected,” Grassley said in a statement.

“An award of $104 million is obviously a great deal of money, but billions of dollars in taxes owed will be collected that otherwise would not have been paid as a result of the whistleblower information.”

A Treasury Department inspector general report from this year also called on the IRS to further beef up the whistleblower program.