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Tax tipsters getting $74M shows IRS progress, lawyers say

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2 years ago

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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. 

Pedestrians walk through the IRS headquarters in Washington, D.C.
Pedestrians walk through the IRS headquarters in Washington, D.C.

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 payout was to former UBS Group AG banker Bradley Birkenfeld, who got $104 million for telling U.S. investigators how his employer helped thousands of Americans evade taxes. 

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 John Hinman, who became director of the IRS Whistleblower Office in 2022 after 39 years in various roles at the agency.

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 Dean Zerbe, who helped write the whistleblower law when he worked for the Senate and now represents tipsters making claims. He wasn’t involved in the most recent case, but said he expects more awards may be announced in the coming days, before the close of the U.S. government’s fiscal year on Sept. 30.

“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.

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Accounting

AI-Driven Automation and Continuous Accounting Frameworks

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6 days ago

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August 15, 2026

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The accounting profession is undergoing a fundamental structural transition as enterprise finance departments shift from periodic month-end closes toward automated continuous accounting models. By integrating specialized machine learning algorithms directly into enterprise resource planning (ERP) platforms, chief accounting officers are transforming financial reporting from a retrospective exercise into a real-time operational asset.

The Shift from Periodic Close to Continuous Financial Reporting
Traditional accounting workflows heavily relied on manual data reconciliation, spreadsheet calculations, and multi-week closing cycles at the end of each fiscal period. In contrast, continuous accounting frameworks utilize automated software agents to process, validate, and post transactional data in real time as business activities occur.

Automated bank reconciliation tools cross-reference incoming bank feeds, invoice records, and purchase orders automatically. By resolving transactional variances instantly throughout the month, corporate accounting teams eliminate the traditional workload spikes associated with quarterly and annual closes.

Machine Learning in Audit Trails and Anomaly Detection
Advanced natural language processing (NLP) and machine learning tools are redefining internal audit and financial control environments. Automated systems analyze 100% of general ledger entries, identifying anomalous transactions, duplicate payments, and unauthorized journal entries in real time.

Rather than relying on random statistical sampling, corporate internal auditors can focus their attention on high-risk flags automatically surfaced by algorithmic monitoring platforms. This continuous risk assessment strengthens internal controls over financial reporting (ICFR) and significantly reduces fraud risk.

Evolving Roles for Accounting Professionals
As routine data entry and manual reconciliation tasks become fully automated, the skill set required for accounting professionals is shifting toward data analysis, system design, and strategic business advisory.
– Systems Governance: Accountants are increasingly responsible for monitoring algorithmic accuracy and managing data integration pipelines.
– Business Partnership: Finance professionals leverage real-time financial dashboards to advise operational leaders on margin management and working capital allocation.
– Regulatory Compliance Management: Accounting teams utilize automated platforms to ensure compliance with dynamic tax codes and international accounting standards.

Core Implementation Recommendations
1. Deploy Automated Reconciliation Tools: Integrate continuous transaction processing modules into existing enterprise ERP architectures.
2. Establish Algorithmic Governance Controls: Implement strict internal testing protocols to ensure automated accounting rules comply with GAAP/IFRS standards.
3. Reskill Accounting Teams: Invest in training finance staff on data analytics, workflow automation, and predictive financial modeling.

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Accounting

Global ESG Reporting Standards and Double Materiality Compliance

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2 weeks ago

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August 9, 2026

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Corporate accounting departments face expanding reporting expectations as international sustainability disclosure standards achieve regulatory enforcement across major global jurisdictions. Chief Accounting Officers (CAOs) and corporate controllers are establishing rigorous internal accounting controls to treat Environmental, Social, and Governance (ESG) metrics with the same data precision, auditability, and governance as traditional financial statements.

Regulatory Harmonization Under Global Sustainability Frameworks
The implementation of standardized sustainability reporting frameworks—notably rules established by international sustainability accounting boards—has created unified expectations for public and large private enterprises. Corporations must report standardized metrics covering greenhouse gas emissions (Scope 1, 2, and material Scope 3), energy utilization, workforce demographics, and supply chain governance.

In Europe and other participating international jurisdictions, double materiality principles are mandatory. Under double materiality, organizations must report both how external sustainability risks impact corporate financial performance, and how internal corporate operations affect surrounding environmental and social structures.

Integrating Sustainability Metrics into Core ERP Systems
To provide auditable non-financial data, enterprise organizations are integrating specialized carbon accounting and ESG management platforms directly into core ERP systems. Automated data collectors capture energy utility invoices, logistics fuel consumption metrics, and vendor compliance records in real time.

Establishing automated, traceable data pipelines ensures that non-financial reporting is supported by clear audit trails. This structured approach allows external financial auditors to provide reasonable assurance on sustainability disclosures during annual corporate reporting cycles.

Financial Impacts and Capital Market Disclosure
Accurate ESG reporting directly influences corporate cost of capital and institutional credit ratings. Commercial lenders and institutional asset managers systematically incorporate sustainability metrics into risk pricing models. Companies that demonstrate transparent, verifiable progress in operational energy efficiency and climate risk mitigation benefit from expanded access to green bond markets and lower debt pricing.

Action Steps for Accounting Leadership
1. Implement Double Materiality Frameworks: Conduct comprehensive assessments to identify material financial and operational sustainability metrics.
2. Build Auditable Non-Financial Data Pipelines: Automate ESG data collection within core accounting software to ensure data integrity.
3. Align Sustainability with Annual Financial Filings: Prepare non-financial disclosures concurrently with financial statements to satisfy regulatory audit expectations.

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Accounting

Modernizing Internal Controls: Machine Learning and Continuous Monitoring in Auditing

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2 weeks ago

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August 5, 2026

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Internal audit departments and corporate risk managers are modernizing internal control frameworks by shifting from periodic sampling techniques to continuous monitoring and machine learning analytics. As operational data volumes increase across enterprise organizations, automated control testing ensures financial integrity, prevents corporate fraud, and streamlines annual audit engagements.

The Limitation of Periodic Audit Sampling
Historically, internal and external auditors evaluated internal controls by reviewing random samples of financial transactions—often analyzing less than five percent of total ledger entries. In complex enterprise environments, periodic sampling methods carry inherent risks of overlooking localized financial misstatements, unauthorized disbursements, or operational control breakdowns.

In 2026, progressive internal audit functions are utilizing automated continuous monitoring platforms that evaluate one hundred percent of financial transactions in real time. Continuous control auditing systems continuously monitor general ledger entries, procurement approvals, and expense reimbursements across all operating subsidiaries.

AI-Powered Fraud Detection and Anomaly Identification
Machine learning models trained on historical corporate financial data excel at identifying subtle transactional anomalies that indicate potential fraud or operational error. Automated systems instantly flag duplicate invoice payments, unapproved vendor creation, unusual journal entry timing, and unauthorized override of authority thresholds.

When an anomaly is detected, the automated auditing platform generates an instant risk alert, allowing internal audit teams to investigate root causes immediately. Early detection prevents minor operational errors from escalating into material weaknesses in financial reporting.

Streamlining External Audit Preparation
Continuous internal control monitoring delivers significant benefits during annual external financial audits. External audit firms can review continuous audit logs and automated control testing documentation, reducing the time required for manual field testing.

This integrated approach lowers overall audit compliance fees, reduces administrative burdens on corporate accounting staff, and provides senior management and audit committees with real-time visibility into the organization’s overall risk profile.

Core Implementation Guidelines
1. Transition to 100% Data Testing: Replace legacy sampling methods with automated continuous audit monitoring systems.
2. Deploy Anomaly Detection Algorithms: Implement machine learning models to identify unauthorized transactions and operational control overrides.
3. Align Internal and External Audit Workflows: Coordinate continuous control testing protocols with external auditors to optimize annual compliance cycles.

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