Whistleblower Lawyer Blog

This is Part II of this whistleblower lawyer blog's description of how IRS Tax Whistleblower officials have explained many of the long-awaited details of the new IRS Whistleblower Rewards Program to whistleblower attorneys at the annual Taxpayers Against Fraud Conference in Washington, a national organization of whistleblower lawyers who represent whistleblowers under the False Claims Act, the state False Claims Acts, and the new IRS Whistleblower Rewards Program for tax whistleblowers. Both parts summarize information provided by IRS Whistleblower officials at this Conference, at which I had the pleasure of participating in a panel discussion with the Director of the IRS Whistleblower Office, Stephen Whitlock, and later spending time with other IRS officials from the IRS group responsible for the Financial Services industry (including hedge funds), Large and Mid-Sized Business Division, Stuart Mann and Nicole Cammarota.

The investigation of matters submitted by whistleblowers will be handled not by the Whistleblower Office, but by other IRS officials--in the field. The Whistleblower Office will initially perform a screening function at the beginning of the process, with "classifiers" reviewing the claim submissions and directing them to the appropriate persons within the IRS for investigation, if an investigation is warranted.

If an investigation results, and the government recovers funds (tax liability, interest, penalties, or other amounts), Director Whitlock then will determine the amount of any award to the whistleblower or whistleblowers. The new statute allows the whistleblower to appeal any determinations to the Tax Court to review decisions about rewards.

The threshold question for persons seeking to submit IRS Whistleblower claims is to demonstrate plainly to the IRS why--with so many potential matters that the IRS already has to investigate, and with limited resources--pursuing an investigation suggested by an informant is the best use of the IRS' limited resources. Not all potential tax violations can be investigated--or will be investigated--by the IRS. Thus, the challenge is to present a whistleblower claim that the IRS will decide to pursue--and pursue vigorously.

Continue reading "Part II: IRS Tax Whistleblower Officials Explain Details of New IRS Whistleblower Rewards Program" »

IRS officials explained long-awaited details of how the new IRS Whistleblower Rewards Program will work to whistleblower attorneys gathered last week at the annual Taxpayers Against Fraud Conference in Washington.

This whistleblower lawyer blog author had the pleasure of appearing with the Director of the new IRS Whistleblower Office, Stephen Whitlock, in a panel discussion on the new IRS Whistleblower Program. I enjoyed spending time with Director Whitlock and with the other participants, Professor Dennis Ventry of American University's Washington College of Law, and attorneys Erika Kelton and Paul Scott. (Paul Scott, our moderator, deserves special thanks put putting together an extremely useful and informative program).

Later, before a second IRS Whistleblower presentation, I enjoyed having lunch and a long discussion of the particulars of the new IRS Whistleblower Program with two other IRS officials: Stuart Mann, one of the lead IRS officials with responsibility over the Financial Services industry, Large and Mid-Size Business Division (LMSB), which includes corporations, subchapter S corporations, and partnerships with assets greater than $10 million; and Nicole Cammarota, who is also with the IRS LMSB Division and who I understand is working on the new IRS Whistleblower regulations.

The Large and Mid-Sized Business Division of the IRS is dealing with IRS Whistleblower claims concerning these larger entities, which can involve very substantial tax liability. The IRS has divided its LMSB Division into five industry subgroups: (1) Communications, Technology, and Media; (2) Financial Services; (3) Heavy Manufacturing and Transportation; (4) Natural Resources and Construction; and (5) Retailers, Food, Pharmaceuticals and Healthcare.

The Financial Services group at the IRS is based at the Manhattan IRS Office at 290 Broadway (near City Hall). Its responsibilities include tax issues relating to commercial banking, savings and loans, life insurance, property & casualty insurance, securities and private pools of capital, including hedge funds and private equity.

After our lunch, Mr. Mann and Ms. Cammarota discussed with the larger group their observations about the new IRS Whistleblower Program, in a panel discussion with Marcella Auerbach and Brian Kenney, led by David Stone. The Director of the IRS Whistleblower Office, Stephen Whitlock, also attended and chimed in about his own areas of responsibility, apparently to make sure the IRS is giving consistent direction about the new Whistleblower Program overall.

Some of the country's leading attorneys in qui tam whistleblower cases and IRS Whistleblower cases will gather for the "First Annual Whistleblower Law Symposium," which will take place at the Georgia State Bar Headquarters on Thursday, September 20, beginning at 9:00 a.m. (See Agenda below). This Whistleblower Law Symposium is organized and co-chaired by the authors of this whistleblower lawyer blog, Michael A. Sullivan and Richard W. Hendrix.

The presenters will include the very successful Pat O’Connell of the Texas Attorney General’s Office, whose group has recovered more than $216 million in health care fraud cases since 1999; and Jim Breen, who has represented relator Ven-A-Care of the Florida Keys Inc. in many very substantial qui tam cases, including the action that led to last week’s announcement by DOJ of a settlement with Aventis Pharmaceuticals Inc.

In addition, Steve Cowen of King & Spalding, LLP will chair a discussion of issues in defending False Claims Act cases; Marlan Wilbanks and other relators’ counsel will speak as well; and Charlie Richards of the Georgia Attorney General's Office and Georgia’s Inspector General Doug Colburn will discuss the new Georgia State False Medicaid Claims Act.

We will also discuss the bill introduced last week by Senators Grassley, Durbin, Specter, and Leahy to make substantial modifications to the federal False Claims Act, the “False Claims Act Correction Act of 2007.” (See http://grassley.senate.gov/public/index.cfm?FuseAction=PressReleases.Detail&PressRelease_id=fac0a482-1321-0e36-ba6f-0150b8a2b182&Month=9&Year=2007).

Further, my partner Richard Hendrix and I will explain and discuss the new IRS Whistleblower Program created by Congress in December 2006. I spent several hours this past week in Washington with the Director of the new IRS Whistleblower Office, Stephen Whitlock, to prepare for and appear in a panel discussion to explain the new IRS Whistleblower Program. I also enjoyed lunch with the lead IRS official responsible for IRS Whistleblower claims in the financial services industry, Stuart Mann, and with Nicole Cammarota, an IRS official who is working on the new regulations. There is a great deal of excitement about this new IRS Whistleblower program, which rewards citizens who report large tax fraud, tax evasion, and other tax law violations to the IRS. (Our firm is pursuing a variety of IRS Whistleblower cases across the country.)

For anyone who believes that taxpayers pay too much to allow fraud against the federal and state governments, these exciting new developments in the law are important.

We are excited to be hosting this Whistleblower Law Symposium, and to discuss recent developments in the False Claims Act, the new state False Claims Acts, and the new IRS Whistleblower Program. The Agenda for the Symposium is below.

Continue reading "Whistleblower Law Attorneys to Gather for Symposium on False Claims Act, State False Medicaid Claims Act, and New IRS Whistleblower Rewards Program" »

Senators Specter and Leahy to Co-Sponsor Pro-Taxpayer Law to "Correct" Recent Court Decisions That Limited Effectiveness to Government of Qui Tam Whistleblower Law, the False Claims Act

In one of the most potentially significant developments ever discussed on this whistleblower lawyer blog, Senator Charles Grassley (R-Iowa) announced today that he and Senator Dick Durbin (D-Illinois) are co-sponsoring a bipartisan bill designed to restore the government's primary tool for fighting fraud against taxpayers, the False Claims Act, to its intended effectiveness. Court decisions in recent years had weakened the False Claims Act and impaired its usefulness in fighting fraud.

The new bill, the "False Claims Act Correction Act," will also be co-sponored by Republican Senator Arlen Specter of Pennsylvania, and Democratic Senator Pat Leahy of Vermont. Representative Howard Berman (D-California) is expected to introduce similar legislation in the House to strengthen the qui tam whistleblower law, which allows private citizens to report fraud against the government and be rewarded.

Senator Grassley and Rep. Berman are largely credited with creating the modern False Claims Act through sponsoring Amendments in 1986 to the whistleblower law.

We applaud this bipartisan effort by these lawmakers to ensure that taxpayers' funds are protected from fraud through the most effective means ever devised--encouraging private citizens to report fraud by allowing them to receive rewards as qui tam whistleblowers. The False Claims Act is as important now as it was when enacted in President Lincoln's time.

Tomorrow in Washington, this whistleblowerlawyerblog author is looking forward to participating in a panel discussion with the Director of the new IRS Whistleblower Office, Stephen Whitlock, to explain how the new IRS Whistleblower Rewards Program works.

We will speak at the Taxpayers Against Fraud Annual Conference in Washington at 6 p.m. on September 9. Leading the panel discussion will be Paul Scott. I am also looking forward to the presentations by Erika Kelton and Professor Dennis Ventry of American University's Washington College of Law.

I have enjoyed speaking with Director Stephen Whitlock before about the progress of this exciting new program that rewards whistleblowers for bringing forth information about tax fraud, tax evasion, and underpayments of taxes. Our firm has been continually impressed by the professionalism of the IRS agents we have worked with in representing clients who have presented whistleblower claims to the IRS.

Yesterday I enjoyed leading a panel discussion of the new State False Claims Acts, at the Southeastern Health Care Fraud Conference in Atlanta. Of particular interest to this audience was the new Georgia State False Medicaid Claims Act that became law in May 2007, which has qui tam whistleblower provisions similar to the federal False Claims Act.

Our audience of health care attorneys heard a detailed account of Florida's successes with its State False Claims Act by Mark S. Thomas, the Chief of Staff and Special Counsel of the Florida Agency for Health Care Administration. We also learned how the Georgia Attorney General's Office plans to implement the new State False Medicaid Claims Act in remarks by Charles M. Richards, Senior Assistant Attorney General of the Georgia State Health Care Fraud Control Unit.

Other excellent presentations were made in this seminar organized by my friends Steve Cowen of King & Spalding, LLP, and Joe Whitley of Alston & Bird, LLP. I am grateful to Joe and Steve for the opportunity to participate and explain the False Claims Act, the new Georgia State False Medicaid Claims Act and other state False Claims Acts, some of which have added interesting new wrinkles to health care compliance, by creating new theories of liability not found in the federal Act. (An article explaining some of the new thoeries of liability that these new State False Claims Acts introduce will appear in the October Georgia Bar Journal.)

To explain in depth this new whistleblower law to attorneys, as well as the federal False Claims Act and the new IRS Whistleblower Rewards Program, our firm has already scheduled the "First Annual Whistleblower Law Symposium" in Georgia at the State Bar of Georgia Headquarters in Atlanta on September 20, 2007. We are excited that joining us is the leader of Texas' already hugely successful effort to recover damages for Medicaid fraud, Pat O'Connell, the Chief of the Civil Medicaid Fraud Section of the Texas Office of Attorney General. Other nationally-known speakers will join us as well on September 20.