In a recent article published by Taxpayers Against Fraud, Baron & Budd attorney Noah Rich addresses the ways in which the federal government works to combat tax fraud.

The IRS says about $1 trillion in federal taxes go unpaid each year. That is enough money to cover the entire budget for the Department of Veterans Affairs and the Department of Education combined for nearly three years. It could also pay for the entire amount that the United States spends on transportation infrastructure and K-12 education each year.

In 2007, the Internal Revenue Service (IRS) established a whistleblower program to help fight against federal tax fraud. The program has helped the IRS collect $6.14 billion in unpaid taxes and awarded more than $1 billion to whistleblowers.

State governments are also affected by tax fraud.

A 2005 study helped prompt several states, including New York, to pass a law permitting whistleblowers to report tax fraud under the state False Claims Act.  In New York, the income tax gap—or the difference between taxes paid and taxes owed—was $2.838 billion in 2002 alone. Assuming a similar tax gap exists today, the state is losing out on more than $50 billion every year.

New York’s tax whistleblower provisions have been very successful. The New York Attorney General’s Office has recovered more than $555 million from False Claims Act cases alleging the underpayment of taxes in the last five years alone.

Several other states also allow whistleblowers to report tax fraud: Illinois, Indiana, Maryland, Rhode Island, and Washington, DC. These states recognize that whistleblowers can help identify tax fraud and help ensure everyone pays their fair share. If every state followed their lead, billions of dollars in unpaid taxes likely would be recovered each year—permitting states to close budget gaps and fund crucial programs.

Contact Baron & Budd

With more than 30 years of experience, the attorneys on Baron & Budd’s whistleblower representation team have represented dozens of clients in government fraud cases returning over $5.4 billion to federal and state agencies, with whistleblower recovery shares as high as 49%. They are ready to help if you have evidence of tax fraud.

Please call (866) 845-2164 or complete our contact form if you would like more information. For more information, see What You Need to Know About Becoming a Whistleblower.  Please understand that contacting us does not mean that you have established an attorney-client relationship with Baron & Budd, P.C.