$100 Million in Penalties Imposed in “STARS” Tax Shelter Case

October 23, 2013 — The Tax Relief and Health Care Act of 2006 initiated the Internal Revenue Service Whistleblower Office to give informants with information about tax fraud the ready means to notify the government. Tipsters who collaborate with the government may receive financial rewards that range between 15 and 30 percent of the amount the IRS recovers. When available, the rewards provide a powerful incentive to blow the whistle on tax fraud.

BB&T Corporation Subsidiary Not Entitled to Half a Billion Dollars in Foreign Tax Credits

A subsidiary of BB&T Corporation was not entitled to $660 million in tax benefits derived from participation in an illegitimate tax shelter referred to as Structured Trust Advantaged Repackaged Securities (STARS), according to a recent ruling by the Court of Federal Claims in Washington, D.C.

The BB&T Corporation (Branch Banking & Trust) is a large American bank that provides retail and commercial banking services as well as other financial services, including mortgages, insurance, consumer and corporate finance and retail brokerage.

KPMG LLP and Barclays Bank PLC worked together to create the STARS transaction with BB&T as a way to generate illicit tax benefits and subvert the foreign tax credit rules. The tax savings were to be shared among participants in the STARS transaction, the Justice Department reports. Sidley & Austin LLP was retained by BB&T to give tax advice in support of the transaction.

The court, which heard evidence in a month-long trial, described the conduct of BB&T, KPMG, Barclays and Sidley Austin as “nothing short of reprehensible” and imposed $112 million in penalties for the failed tax scam.

Insiders Are Central to Fight Against Tax Fraud

Before contacting the IRS, whistleblowers should seek out the help of a knowledgeable qui tam lawyer to be certain how the process works. Rewards for tips about an individual’s tax violations may be given only when the taxpayer’s gross income exceeds $200,000 for every taxable year in question and the IRS recovers more than $2 million. For unique information concerning a corporation’s tax violations, however, rewards may be available regardless of the size of the government’s recovery.

Waters & Kraus’ tax fraud lawyers offer tipsters the sound advice they need and deserve. Contact us by email or phone our whistleblower attorneys at 855.784.0268 to discuss how we can safeguard your interests while guiding you through the process.

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That’s the first question everyone asks. The truth is it’s impossible to know. But we can tell you this. Waters Kraus Paul & Siegel has what it takes to fight against big corporate interests and win. That’s why we’ve taken more mesothelioma trials to verdict than any other firm. And that’s why we’ve recovered more than $1.3 billion for clients like you. Do you think you have a case? Contact us now to speak with an attorney.

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