Paul L. Caron

Friday, June 13, 2008

Law Firm Files First $4 Billion Tax Whistleblower Submission with IRS

I previously blogged the first $1 billion, and then $2 billion, Tax Whistleblower submissions to the newly created IRS Whistleblower Office, filed by The Ferraro Law Firm (Miami, FL & Washington, D.C.). The firm today announced that it has filed the first $4 billion Tax Whistleblower submission:

Today, The Ferraro Law Firm filed a new record tax whistleblower submission of more than $4.4 billion to the IRS Whistleblower Office. The Ferraro Law Firm has now brought to the U.S. government’s attention dozens of taxpayers who have collectively underpaid their taxes by more than $10 billion. The previous known record submission of $2 billion was also filed by the firm on December 11, 2007. The IRS established the Whistleblower Office in 2007 to collect information about tax cheats and must, by law, pay a reward of up to 30 percent of the amount collected to the tax whistleblower.

In this most recent submission, a tax whistleblower has come forward to allege that a Fortune 500 company has underpaid its U.S. tax liability by more than $4.4 billion, over a short period of time, by engaging in abusive tax transactions.

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I find it facinating that a law firm whose web site brags about the importance of confidentiality in these matters will turn around and issue a press release the same day they submit the case to the IRS. The press release issued by Ferraro, as in their many earlier press releases, provide information about the taxpayer. Here we know the taxpayer is a Fortune 500 company and it is allegedly a $4.4 billion dollar issue.

Clearly the taxpayer is now alerted that any IRS examination is due to a whistleblower, perhaps putting the whistleblower is some sort of danger (i.e. loss of employment, loss of license, or perhaps even physical danger).

It appears to be more important to the Ferraro firm that they promote themselves to the detriment of their clients. In addiiton, it is interesting that they issue these press releases with perhaps made up numbers. Nobody, including the IRS, will ever acknowledge the accuracy of the $4.4 billion number or whether it is made up. Again, since the firm is more interested in marketing itself for a potential future client, it appears more likely that the $4.4 billion is stretching the truth by a few zeros.

Posted by: Janet Jones | Jun 13, 2008 3:24:05 PM

Agree with the post above. When it comes to federal tax law, the Ferraro firm is basically clueless. They are doing nothing more than fishing for a big contingency fee payday, based on the whistleblower statute (which they seriously misunderstand).

Posted by: Jake | Jun 13, 2008 8:46:57 PM

It is interesting to note the blog on the Ferraro Law Firm followed by the above comments. As a former IRS attorney that handles only tax whistleblower cases, I believe that confidentiality is of the utmost importance. In fact, our firm will guarantee the confidentiality of a tax whistleblower or forfeit our fee. Therefore, we will not disclose the number of tax whistleblower cases we handle, the dollar amount, or any other information including the background of the taxpayer so as to protect our clients and the tax whistleblower process. Yes, we recognize that the Ferraro firm is successfully promoting itself through these numerous press releases. We also note that the numbers and facts stated within a press release cannot be verified by an independent source and we note that most attorneys engaged in this area of the law are not promoting themselves by divulging potentially confidential information.

Therefore, we, as attorneys, are certainly disappointed that our fellow members of the bar would promote themselves to what we perceive is to the detriment of their clients.

Posted by: Tom | Jun 19, 2008 7:50:03 AM