The US Tax Whistleblower Program has been in place for two decades and has shown the effectiveness of whistleblowers in uncovering and prosecuting international tax evasion. In that time, the IRS Whistleblower Office collected over $7 billion in unpaid taxes and paid $1.3 billion in rewards to tax whistleblowers.[1] The IRS Whistleblower Office’s most notable success was with the whistleblower Bradley Birkenfeld, who provided information to the IRS that led to the prosecution of the Swiss bank UBS and was awarded of $104 million.[2] The success of Birkenfeld and the UBS prosecution proved that Swiss banks were not beyond the reach of US whistleblowers.
Following the highly successful example of the IRS Whistleblower Office, the Her Majesty’s Revenue and Customs (HMRC) recently implemented a Strengthened Reward Scheme. This program offers rewards of 15-30% to whistleblowers who provide information on tax avoidance that results in a successful collection of at least 1.5 million in tax.[3] It is estimated that “$21 to $32 trillion in financial assets are sitting offshore in tax havens.”[4] A report by Royal United Services Institute (“RUSI”) Fellow Eliza Lockhart found that these reward programs are both highly effective and cost-efficient because they incentivize whistleblowers with rewards paid from the money they help recover.[5] Whistleblowing, then, becomes an important part of an effective anticorruption system by making it a practical economic choice.
The UK’s HMRC...
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