"The Internal Revenue Service awarded tax whistleblower and former UBS AG UBS +2.32%banker Bradley Birkenfeld $104 million for providing the agency with insider information in UBS's illegal encouragement of secret offshore accounts by U.S. taxpayers.
Mr. Birkenfeld's lawyers said it is believed to be the largest reward ever given to an individual whistleblower in the U.S. The Internal Revenue Service issued a statement confirming the award had recently been made, because Mr. Birkenfeld signed a disclosure waiver, but didn't comment on whether it is the largest whistleblower award.

[url=]Clos[/url]Bloomberg

Bradley Birkenfeld, a former UBS AG banker, at Schuylkill County Federal Correctional Institution in Minersville, Penn., in April 2009.

Mr. Birkenfeld told U.S. investigators about illicit practices allegedly encouraged by UBS. In 2009, the Swiss bank paid $780 million to resolve a pending criminal case and agreed to turn over information about more than 4,000 secret account holders who were U.S. taxpayers, lifting the veil on Swiss bank secrecy.
Mr. Birkenfeld wasn't present at the announcement. He was recently released to a halfway house after serving part of a 40-month sentence for a felony conviction. In 2008, he was charged with withholding information about his own role in the plot, concerning his relationship with a wealthy California developer. He pleaded guilty to one count of conspiracy.


In 2009 Mr. Birkenfeld filed a claim under a 2006 law that awards whistleblowers up to 30% of revenue recovered using information they provided.
Bryan Skarlatos, a criminal tax attorney with Kostelanetz & Fink in New York, said he and others were surprised by the size and relative speed of the award, calling it a "watershed event" for the IRS whistleblower program.
"The result is that taxpayers are more likely to come forward, large companies will be more concerned about being turned in , and the IRS whistleblower program is likely to become a more important component of tax enforcement," he said.
Mr. Birkenfeld's lawyer, Dean Zerbe of Zerbe, Fingeret, Frank & Jadav in Washington, said his client still has several whistleblowing claims outstanding, and the $104 million payment revealed Tuesday pertains to the $400 million in tax paid by UBS as part of the settlement.
The $104 million award to Mr. Birkenfeld is taxable, experts said. They speculated that the lawyer's fees could range from 15% to 35% of the pretax award.
Mr. Birkenfeld's lawyers released a redacted copy of the IRS's recommendation of the award to him. It noted that Mr. Birkenfeld "provided information on taxpayer behavior that the IRS had been unable to detect" and provided "exceptional cooperation." His lawyers said his information led to the recovery of more than $5 billion, in part because of the agency's limited amnesties for U.S. taxpayers holding secret offshore accounts.
The award was made under a program Congress added to the law in 2006, sponsored by Sen. Charles Grassley (R-Iowa). Since then, he has goaded the agency to implement the program and move more quickly to making large awards. In a statement, he said "The potential for this program is tremendous, and billions of dollars in taxes owed will be collected that otherwise would not have been paid.
An IRS spokeswoman said the agency "believes the whistleblower statute provides a valuable tool to combat tax non-compliance, and this award reflects our commitment to the law."
" - Wall Street Journal 9/11

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