UBS whistleblower awarded largest ever amount by IRS

The Internal Revenue Service has awarded a former Swiss banker $104 million for providing information on overseas tax cheating. This is the largest award every by the IRS. The whistleblower exposed widespread tax evasion in the global bank of UBS AG, based in Switzerland. New Jersey residents may be familiar with the bank, as it has numerous branches throughout the state.

The whistleblower served two and-a-half years in prison in relation to the case for fraud conspiracy, which resulted in a fine of $780 million against the bank. UBS was also required to provide the names of thousands of suspected American tax cheaters to the IRS. The IRS is making it known that reporting tax fraud is safe and secure -- and carries a definite incentive. In 2006, Congress passed a law targeting high-income tax dodgers, which guarantees whistleblowers will be financially rewarded.

Though this whistleblower did serve time in prison for being associated with the tax fraud, he has been handsomely rewarded for his trouble. Billions of dollars in taxes owed will be collected as a result of his reporting, which is good for not only the IRS but the average tax payer.

The IRS offers this incentive to report tax fraud in order to ensure that the cases are fully investigated and are legitimate. Tax fraud is a serious issue which affects all members of society, regardless of income. By maintaining this program, the IRS may be able to change its reputation from being one of the most hated government agencies, instead bringing the focus toward tracking down cheats for the betterment of "average folks."

Source: The Washington Post, "IRS pays whistleblower $104 million for providing information about overseas tax cheats," Sep. 11, 2012