Taxation & Estate Planning

What of the Whistleblower?

By Darrin Mish

In what is seen as a controversial decision, US District Judge Willian Zloch sentenced Bradley Birkenfeld, the man who gave the IRS information on how UBS bank of Switzerland was helping American clients evade taxes, to 40 months' jail for his role in the affair. Some, like Dean Zerbe of the National Whistleblowers Center, have viewed the sentence as harsh and a deterrent to future whistleblowers. Others like George Clarke, a member of the white collar and internal investigations and tax practice at the Miller and Chevalier law firm feel that the sentence was fitting justice for the crime.

A former UBS private banker, Birkenfeld assisted the IRS in investigating about $20 billion worth of assets that wealthy American taxpayers had hidden in offshore accounts in banks such as UBS. He also revealed insider information like the bank's banking practices, accounting reports, internal memos and emails, training guidelines, details of UBS employees' travels to the US and how they were trained to avoid detection when visiting clients. According to Birkenfeld, UBS attracted US clients by sponsoring various activities such as art fairs and tennis tournaments.

In April 2008, Birkenfeld and Liechtenstein investment banker Mario Staggl were charged with helping California billionaire Igor Olenicoff and others evade taxes. Birkenfeld pleaded guilty in June 2008 while Staggl remains a fugitive.

In a request for leniency on August 18th, the government revealed that Birkenfeld's cooperation directly resulted in the IRS UBS settlement of this issue where the bank agreed to release details of 4,450 of its clients suspected of dodging taxes using their bank accounts. In relation to that, Birkenfeld also requested for only a probationary sentence. His request was supported by letters from US Senator Carl Levin of Michigan, representatives from the Securities and Exchange Commission, the IRS and Rosie Casals, a former women's professional tennis player. The judge rejected both appeals and meted out a jail term of 40 months out of a potential 60 months and included a fine of $30,000.

Prosecutors noted to the judge that Birkenfeld initially did not reveal his personal role in the scheme but said that his cooperation is still required in their ongoing expanded investigation into the surreptitious part of offshore banking. In that light, Kevin Downing, the senior trial attorney in the US Justice Department sought a 90 day postponement of Birkenfeld's prison term. The judge allowed Birkenfeld until January 8th to report to prison.

Besides Birkenfeld, another former UBS banker Raoul Weil was indicted and declared a fugitive and another ex-UBS manager and a Swiss lawyer were also indicted recently.

Darrin T. Mish is a veteran, nationally recognized tax attorney who has focused on providing IRS help to taxpayers for over a decade. He regularly travels the country training other attorneys, CPAs and enrolled agents on how to handle their toughest cases with the IRS. He is highly ranked among the top attorneys in the country, with an AV rating from Martindale-Hubbell and a perfect 10 on Avvo.com. Martindale-Hubbell has also honored him with a listing in their Bar Register of Preeminent Lawyers. He is a member of the American Society of IRS Problem Solvers and the Tax Freedom Institute. With clients on every continent but Antarctica, he has what it takes to solve your IRS problems no matter where you live in the world. If you would like more information about his practice and how he can help you, please call his office at (813) 229-7100 or toll free at 1-888-GET-MISH.

What of the Whistleblower? is a post from: IRS Tax Problem Solver Blog - IRS Help

Full post as published by IRS Problem Solver Blog on December 07, 2009 (boomark / email).