October 1, 2013 — The Tax Relief and Health Care Act of 2006 established the Internal Revenue Service Whistleblower Office to encourage tipsters with unique information about tax fraud to notify the government. Whistleblowers who collaborate with the IRS may be eligible to receive financial rewards ranging from 15 to 30 percent of the funds the IRS recovers. The rewards, when available, offer a powerful incentive to notify the IRS about tax fraud.
Owner of Adult Entertainment Club Charged With Obstructing the IRS
The IRS and the U.S. Justice Department have charged Massachusetts businessman Richard L. Furnelli with four counts of failing to file individual income tax returns, four counts of tax evasion and one count of obstructing the internal revenue laws.
Between 1994 and 2009, the Justice Department alleges, Furnelli used nominee owners to hide his ownership interests in a web of businesses, including an adult entertainment club. The subterfuge obstructed the ability of the IRS to calculate Furnelli’s income as well as the taxes he owed.
According to the government, Furnelli’s total income between 2006 and 2009 exceeded $2 million. But Furnelli allegedly failed to file individual tax returns during that time. Furnelli allegedly avoided paying personal income taxes by directing that his income be paid to RLF Ventures LLC, a nominee entity. Furnelli is also alleged to have used a nominee’s name on a bank account he used for deposits, payments and cash withdrawals.
Insiders Help Fight Tax Fraud
Insider employees with knowledge of tax fraud scams provide invaluable assistance to the government. Before notifying the IRS, however, whistleblowers would be wise to seek out the help of an experienced qui tam lawyer to learn how the process works. Rewards for information about an individual’s tax violations are restricted to cases in which the taxpayer’s gross income tops $200,000 for every taxable year in question and the government recovers more than $2 million. Rewards for unique information about a corporation’s tax violations, on the other hand, may be awarded no matter the size of the government’s recovery.
Waters & Kraus’ financial fraud lawyers offer tipsters the legal counsel they need and deserve. Contact us by email or call our whistleblower attorneys at 855.784.0268 to learn how we can guide you through the process and safeguard your interests.
