Big Win for Tax Whistleblowers
In a recent decision, the U.S. Tax Court ruled for the first time that whistleblowers are entitled to a portion of criminal fines and civil forfeitures in addition to a portion of the taxes collected by the Government. The Court awarded $17.8 million to two whistleblowers who came forward with information that lead to a guilty plea and payment of over $74 million in tax restitution, criminal fine, and civil forfeitures to the Government. The Court’s decision that the amounts used to calculate the award include all proceeds collected by the Government from the taxpayer will allow whistleblowers to receive an award regardless of whether the Government pursues the tax violators in civil or criminal procedures.
Under the IRS whistleblower award program, people who have knowledge of tax violations can file confidential claims with the IRS and receive between 15% and 30% of the amount recovered by the Government. In fiscal year 2015, the IRS paid 99 awards totaling more than $103 million.
About Faruqi & Faruqi, LLP
Faruqi & Faruqi, LLP focuses on complex civil litigation, including securities, antitrust, consumer class actions, shareholder derivative litigation and whistleblower (Qui Tam) litigation. The firm is headquartered in New York, and maintains offices in California, Delaware and Pennsylvania. Since its founding in 1995, Faruqi & Faruqi, LLP has served as lead or co-lead counsel in numerous high-profile cases which ultimately provided significant recoveries to investors, consumers and employees. To schedule a free consultation with our attorneys and to learn more about your legal rights, call our offices today at (877) 247-4292.
About T. Talyana Bromberg
Talyana Bromberg is a partner in Faruqi & Faruqi, LLP’s Pennsylvania office and chair of its False Claims Litigation group. Ms. Bromberg focuses her practice on representing whistleblowers in Medicare and Medicaid fraud cases, educational, financial, tax, defense contractors’ fraud and matters involving bribery under the Foreign Corrupt Practices Act.
Ms. Bromberg was a lead attorney representing whistleblower Ronald Streck in the lawsuits against pharmaceutical manufacturers AstraZeneca Pharmaceuticals LP, Cephalon, Inc., and Biogen Inc. relating to underpayment of Medicaid rebates, with a settlement totaling $55.5 million. She represented whistleblowers in pharmaceutical lawsuits against Abbott Laboratories related to off-label promotion and payment of kickbacks for anti-seizure drug Depakote that resulted in a $1.6 billion settlement; against GlaxoSmithKline related to unlawful marketing tactics and kickbacks for GSK drug Advair for a $1.04 billion settlement; and against Pfizer for alleged illegal promotion of its kidney transplant drug Rapamune, resulting in $257 million settlement.
The False Claims Act allows whistleblowers to sue those who commit fraud against the government and to receive between 15 and 30 percent of the recovered funds. The law covers fraud involving any government-funded contract or program, including Medicare, Medicaid, military, transportation, housing, educational, agricultural, or other program. Separate IRS, SEC and CFTC whistleblower programs cover federal tax fraud, securities and commodities fraud. Since 1986, whistleblowers have helped the government to recover more than $40 billion by bringing lawsuits under the federal and state False Claims Acts.