August 6, 2014 — The Tax Relief and Health Care Act of 2006 established an IRS Whistleblower Office so whistleblowers with information about tax fraud could notify the IRS and receive compensation. The Act allows informants to receive a percentage of 15 to 30 percent of the funds recouped by the IRS. To qualify for compensation concerning an individual’s IRS violations, the tax evader’s gross income must be more than $200,000 for every taxable year involved and the government’s recovery must exceed $2 million. To receive a reward for a tip in connection with a corporation’s wrongdoing, no minimum recovery is required.
San Jose Man Hid Fortune in Foreign Bank Accounts
Ashvin Desai, a California medical device manufacturer, has been sentenced to a six-month prison term and home confinement for hiding $8 million in bank accounts in India and Dubai.
In October 2013, Desai was convicted in a jury trial for hiding over $1.2 million in interest income generated by the accounts. Prior to sentencing, the IRS had demanded Desai’s payment of a $14 million penalty.
From 2007 to 2009, Desai reportedly maintained a number of bank accounts at HSBC in Dubai and India. The accounts, some of which Desai held in his wife’s and adult children’s names, were invested in various certificates of deposit, at varying interest rates. Desai deposited U.S. checks into the Dubai and India accounts and transferred funds to the India accounts from other undeclared bank accounts in the United Kingdom and Singapore. At least once, Desai instructed a medical device customer to make payment by wiring funds straight to Desai’s undeclared HSBC account in India. To hide the foreign accounts from the IRS, Desai instructed HSBC not to send account statements to his home address.
During the same 2007 to 2009 time period, Desai’s deposits into the foreign accounts in Dubai and India greatly surpassed the income reported on his federal tax returns. Desai deposited almost $1.1 million into the accounts in 2008, for instance, but disclosed only $115,810.91 in income on his tax return. He paid only $17,000 in taxes, but owed the IRS more than $350,000 in additional taxes on the unreported interest income.
Employees Notify IRS About Employers’ Tax Fraud
While Waters & Kraus did not handle this particular tax fraud lawsuit, we are representing whistleblowers in similar matters involving tax evasion. If you have information concerning similar tax violations involving a different individual or business, contact us by email or call our qui tam attorneys at 855.784.0268 to learn more about our practice and how we can work together to notify the government about IRS fraud. Our qui tam lawyers in the firm’s southern California office, like Michael Armitage and Louisa O. Kirakosian, are committed to safeguarding and advancing informants’ interests.
Contact us by email or call our attorneys at 855.784.0268 to discuss how we can help.
