By ratting on his employer and clients, the UBS informant greatly advanced Washington’s project of preventing Americans from squirreling assets out of reach of the U.S. tax and legal systems. So it’s no surprise that few in the federal establishment — even among longtime critics of what they deem excessive executive compensation — begrudge him the whopping payout. Among his defenders, of course, is Iowa Republican Sen. Charles Grassley, patron of the whistleblower program: “Need we add that Mr. Grassley’s longtime aide, who actually drafted the whistleblower law, now represents Mr. Birkenfeld and stands to collect an interesting percentage of the award Mr. Grassley so obligingly applauds? If one were rich, if one had a sense of history, one might well wish to move a part of one’s nest egg out of the way of Mr. Grassley and his ilk.” [Holman Jenkins, WSJ]
5 Comments
It’s become tough for people who want to keep their money out of reach of the U.S. legal system but NOT out of the tax system. I don’t mind having the IRS know that I have some money in another country; I’m not trying to hide any income. But I’d like to have it out of their reach in case I ever decide to expatriate myself and they feel they have a right to it.
Reuven,
Work harder. Millions on welfare are depending on you.
This has also made it very difficult for expats who are living legally outside the US, and who report all of their income and savings to the IRS, to do business in those countries, because more and more foreign banks do not want to do business with US citizens. The hassle and threat of prosecution by the US govt is too much. They are telling US citizens to go away. In some countries, this is essentially the same as a deportation order, because it is extremely difficult to live in a foreign country without a bank account.
So what’s your real gripe? Sounds like those who like to cheat on their taxes (thereby committing crime) feel compelled to take a swipe at the whistleblower who exposed 19,000 tax cheats/frauds/felons.
The reward was large. So what? The recovery by the government due to the whistleblower’s efforts was enormous, over $5 Billion.
Really? Read the article a bit more carefully:
While “an award of $104 million is obviously a great deal of money,” Grassley said, “billions of dollars in taxes owed will be collected that otherwise would not have been paid as a result of the whistleblower information.”
The program hasn’t met expectations, IRS officials said in interviews earlier this year.
In other words, those billions of dollars aren’t materializing, probably because they don’t really exist. In 2011, the IRS whistleblower office collected a whopping $48 million in taxes from all sources combined. The amount recovered will be even less if one is honest and deducts the costs of huge bureaucracies involved here. Heck, it might even be net loss.
The award of $104 million is just bizarre.