South Florida Woman Consents to $21 Million Penalty to Resolve IRS Fraud Charges

February 21, 2013 — The IRS Whistleblower Office was set up in 2006 to provide financial incentives to informants who provide the IRS with information that results in the recoupment of fraudulently withheld tax payments. Under the Tax Relief and Health Care Act of 2006, the IRS Whistleblower Office is authorized to reward tipsters with a share of any recovery made. The reward for IRS collaborators can range from 15 to 30 percent.

When the fraud involves an individual, the Tax Relief law restricts whistleblower rewards to instances where the individual’s gross income is more than $200,000 for each taxable year in question and where the amount recovered for tax, penalties, interest, and other amounts exceeds $2 million. In cases involving a corporation, tipsters are eligible for a reward regardless of the amount of the recovery. When corporations file fraudulent returns, company insiders are frequently the first to know and to notify the IRS.

IRS Imposes Hefty Penalties for Failure to Report Income from Foreign Accounts

A Palm Beach, Florida woman, Mary Estelle Curran, has pleaded guilty to filing false 2006 and 2007 tax returns, the Department of Justice reports. A U.S. citizen, Curran allegedly maintained undeclared bank accounts that she inherited in 2000 from her husband. The accounts were with two entities, a bank in Liechtenstein and with UBS AG in Switzerland. The Swiss accounts were held by nominee foreign entities, including Norega Investment and the Flognet Foundation. Each year, the accounts earned income, which Curran did not report on individual income tax returns from 2001 to 2007.

The value of Curran’s undeclared foreign accounts was more than $42 million in 2007. To settle this matter with the IRS, Curran has consented to pay a civil penalty of $21,666,929, which is half of the high balance of the undeclared accounts. This amount greatly exceeds the government’s tax loss of $667,716.

Waters & Kraus: Helping Whistleblowers Report Tax Fraud

Providing aggressive representation of informants in qui tam lawsuits, Waters & Kraus maintains law offices in Texas, Maryland, and California. The firm is involved in a number of significant federal and state whistleblower actions involving government contractors, health care providers, large pharmaceutical companies, and school district contractors.

To learn more about Waters & Kraus, or to speak with one of our whistleblower attorneys about your potential tax fraud information, email us or call 800.226.9880.

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