Accounting
Tax tipsters getting $74M shows IRS progress, lawyers say
Whistleblower lawyers who have long complained that the Internal Revenue Service takes far too long to process tips about tax evasion are billboarding a $74 million payout as a sign of improvement.
Three people shared the award after disclosing an offshore tax-evasion scheme that spanned 15 years, enabling the IRS to collect $263 million from an unidentified individual, according to attorneys for Getnick Law, which helped represent the lead whistleblower. Although it took years to resolve the case, recent policy changes significantly shortened the time it took to pay the whistleblowers, the lawyers said.
“We think that this victory that we have achieved together with the IRS Whistleblower Office is a harbinger for the future,” said Neil Getnick, managing partner at Getnick Law, in an interview.
Andrew Harrer/Bloomberg
The IRS declined to comment, and lawyers for the tipsters didn’t disclose the names of their clients.
Under the IRS program, which began in 2007, about 2,500 tax tipsters have gotten $1 billion for providing information that led to collections of $6 billion. The biggest
But a process that typically takes a decade or longer has been criticized by whistleblower advocates, who say the IRS has been far less responsive on paying tipsters than the Justice Department, Securities and Exchange Commission and Commodity Futures Trading Commission. In its first five years of existence, the IRS program made no payment, after more than 1,300 tipsters came forward. Since then, the program has lurched forward.
“I realized we needed to work on improving the system,” said
High-value claims
In an interview, Hinman said he has expanded the office to 84 employees from 48, with a goal of reaching 130. They’re improving evaluation of tips and working more closely with lawyers who represent whistleblowers, he said.
“We’ve done a lot of work around systems and processes to improve identification of high-value claims,” Hinman said. “We’re continuing to collaborate with whistleblower practitioners.”
IRS investigations of tax claims can take years to resolve as taxpayers pursue possible appeals, delaying any rewards for tipsters. To address that, the agency has sought to make earlier partial payments in cases initiated by whistleblowers, a process known as “disaggregation,” Hinman said.
“We’re looking at our inventory to see what sort of claims we can disaggregate and break apart when their cases are done and there’s been a final determination of tax,” he said. “We’re really hopeful that we can sort of modify our processes to pay awards even sooner.”
Hinman’s efforts are beginning to pay off, said attorney
“The program is absolutely heading in the right direction,” Zerbe said. “They’ve had some growing pains, but Hinman has brought in some new energy.”
Lawyers have complained the agency has long battled whistleblowers over their awards. Under the law, tipsters can reap 15% to 30% of any taxes collected. Those awards are now increasing, according to Zerbe, who represented Birkenfeld and has many pending claims.
In the most recent case, the trio of whistleblowers got the maximum, minus several million dollars under U.S. legislation cutting all government payments, according to their attorneys.
Reducing delay
Chris McLamb, an attorney at Whistleblower Partners who represented another one of the tipsters, said his client benefited from recent improvements to the program. For example, the agency rewarded the whistleblowers for helping it fully recoup money from one taxpayer even as it continues to examine other taxpayers in the case. For years, the IRS typically refused to pay up if there was a chance of recovery from other taxpayers based on a whistleblower’s information.
“That was a major cause for delay,” he said.
Separately, the IRS let the whistleblowers negotiate among themselves on how to divide the award, which helped avoid possible challenges to an agency decision on how to split the bounty, McLamb said. That alone may have shortened the timeframe for collecting the money by years, he said.
“The significant challenge that remains is getting the rest of the IRS, including the investigative arm, to engage more with whistleblowers,” McLamb said.
Aprio, a Top 25 Firm based in Atlanta, has acquired JMS Advisory Group, a firm that specializes in unclaimed property compliance and escheat process development, also based in Atlanta
Financial terms of the deal were not disclosed. Aprio ranked No. 24 on Accounting Today’s just released
JMS was founded in 2006 and helps clients mitigate risk and capitalize on opportunities through managed unclaimed property compliance. The team includes attorneys, CPAs, CFEs and others.
JMS has a wide range of clients, including enterprise companies, financial institutions, credit unions, insurance companies, hospitality and health care organizations.
“As Aprio continues its rapid growth, we are committed to expanding our services to meet the evolving needs of our clients,” said Aprio CEO Richard Kopelman in a statement Tuesday. “The addition of JMS gives us the opportunity to continue strengthening our position as a future-focused advisory firm. JMS’s focus on escheat management and asset recovery not only enhances our current capabilities but also allows us to deliver even more impactful solutions to help businesses navigate complex compliance challenges.”
JMS president and CEO James Santivanez is joining Aprio as a partner and provides guidance to clients on unclaimed property and state and local tax issues.
“We created JMS to make an impact nationally in the unclaimed property consulting industry, and I’m proud of our nearly 20-year history of helping clients mitigate risk and capitalize on opportunities resulting from accurate and properly managed unclaimed property compliance,” Santivanez said in a statement. “Joining with Aprio takes us to the next level, allowing us to build upon our success while providing even greater value to our clients. This is an exciting next step in our journey.”
JMS founder and director Sherridan Santivanez is also joining Aprio as a partner. He specializes in representing clients before state enforcement authorities and managing complex audits and voluntary disclosures for some of the world’s largest companies. She provides strategic guidance on audit preparation and navigates interactions with state and third-party auditors.
Aprio received a
The American Institute of CPAs and the National Association of State Boards of Accountancy are asking for comments on their proposal for an additional pathway to CPA licensure through
The AICPA and NASBA proposed the
The UAA changes would:
- Enable states to adopt a third licensure pathway that requires earning a baccalaureate degree with an accounting concentration, completing two years of professional experience as defined by Board rule, and passing the Uniform CPA Examination;
- Shift to an “individual-based” mobility model, which allows CPAs to practice in other states with just one license; and
- Add safe harbor language to ensure CPAs who meet existing licensure requirements preserve practice privileges.
The proposals come as several states are already moving forward with their own changes, including
The updates reflect feedback gathered during a late 2024 exposure draft period and forward-looking solutions being advanced by state CPA societies and boards of accountancy to increase flexibility for licensure candidates while maintaining the integrity of the CPA license.
The AICPA and NASBA are asking for comments on the proposed changes by May 3, 2025. They can be submitted through this
The UAA offers state legislatures and boards of accountancy a national model they can adopt in full or in part to meet the licensure needs of each jurisdiction.
The proposal would maintain the current two pathways to CPA licensure:
- Earning a post baccalaureate degree with an accounting concentration, completing one year of professional experience as defined by Board rule, and passing the CPA exam; and,
- Earning a baccalaureate degree with an accounting concentration, plus an additional 30 semester credit hours , completing one year of professional experience as defined by Board rule, and passing the CPA exam.
Small business employment held steady last month, according to payroll company Paychex, while wage growth continued below 3%
The
“Our employment data continues to show moderate job growth and wage growth below three percent,” said Paychex president and CEO John Gibson in a statement Tuesday. “The consistent long-term trend we’re seeing is a small business labor market that is resilient and stable with little job movement among workers. At the same time, small business owners are optimistic about future business conditions despite uncertainty about how to adapt to a rapidly evolving legislative and regulatory landscape.”
The Midwest remained the top region in the country for the ninth consecutive month with a jobs index level of 100.54. Seven of the 20 states analyzed gained more than one percentage point in February, led by Texas (up 2.11 percentage points).
Phoenix (101.92) increased its rate of small business job growth for the fourth month in a row in February to rank first among the largest U.S. metros.
Construction (3.29%) regained its top spot among industries in terms of hourly earnings growth in February, followed closely by “other services” (3.27%) and manufacturing (3.21%).
The pace of job growth in manufacturing gained 2.39 percentage points to 99.52 in February, the industry’s biggest one-month increase since April 2021.
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