November 19, 2013 — The Tax Relief and Health Care Act of 2006 put into place the Internal Revenue Service Whistleblower Office for tipsters with information about tax fraud. Informants who notify the IRS are eligible to receive financial rewards that vary from 15 to 30 percent of the amount the government recoups. When available, the rewards provide a powerful incentive for whistleblowers to collaborate with the IRS on tax fraud.
Florida Doctor Filed False Tax Returns Concealing Millions of Dollars
Dr. Patricia Lynn Hough, who resides in Englewood, Florida, has been convicted of conspiring to cheat the IRS by hiding millions of dollars in income and assets in offshore bank accounts and filing false income tax returns that did not disclose the accounts or the income concealed in them.
The evidence at trial established that Hough used to own two medical schools in the Caribbean — The Medical University of the Americas in Nevis, West Indies and The Saba University School of Medicine in Saba, Netherlands Antilles. In April 2007, Hough sold the medical schools and associated real estate for over $35 million. But Hough and her husband, Dr. David Fredrick, conspired to defraud the IRS by hiding their proceeds from the sale in the undeclared accounts of nominee entities at UBS and other foreign banks. Hough failed to report most of the proceeds to the IRS and she paid no taxes on the money.
According to the Justice Department, Hough and her co-conspirator directed asset managers and Swiss bankers via email, phone calls and meetings in person to move funds out of the undeclared UBS accounts and into other investments. Dr. Hough and Dr. Fredrick used the money to buy a condo in Sarasota, two North Carolina homes and their own airplane.
Hough was also convicted for filing false tax returns for four years running — 2005 to 2008. U.S. citizens are required to report to the IRS when they have a financial interest in foreign accounts and to disclose any income from the foreign accounts.
Insiders Blow the Whistle on Tax Cheats
Before you notify the IRS, ask for the help of a knowledgeable qui tam attorney to be sure of how the process works. Waters & Kraus has experienced whistleblower lawyers in offices from coast to coast. Contact us by email or call our tax fraud attorneys at 855.784.0268 to discuss how we can protect your interests as you collaborate with the IRS.