“Whistleblowing” or reporting an employer’s violations of internal revenue laws is a method of uncovering tax fraud. Often, employees closest to a company are the first to notice an employer’s non-compliance with tax laws. The Taxpayer First Act (“TFA”) provides protection for a tax whistleblower who uncovers an employee’s non-compliance with internal revenue laws, including tax fraud and underpayment of taxes. The Occupational Safety and Health Administration (OSHA) handles complaints of retaliation submitted under the TFA.
Who is protected from retaliation?
The TFA guarantees protection to “any officer, employee, contractor, subcontractor, or agent” of an employer who reports suspected violations of internal revenue laws.
What activity is “protected activity” under the Taxpayer First Act?
Unlike some whistleblower laws, a whistleblower doesn’t necessarily have to make a report directly to a government agency to trigger TFA retaliation protections. An employee need only bring the suspected violation to the attention of his or her supervisor or a person working for the employer “who has the authority to investigate, discovery, or terminate misconduct.” Depending on the company, this may be the owner of the company, the company’s comptroller or accountant, the Vice President of Finance, or simply an employee’s manager. Of course, while an employee may also choose to make official reports to the IRS, Secretary of Treasury, or other included government entity – such activity is not a requirement to trigger protections. An employee who engages in any of the following activities is protected from retaliation under the TFA:
- Providing information relating to tax fraud or underpayment to an included government entity, the employee’s supervisor, or upper management;
- Assisting in an investigation regarding the underpayment of taxes, tax fraud, or any conduct which the employee reasonably believes violates internal revenue laws;
- Testifying, participating in, or assisting in any administrative or judicial action taken by the IRS relating to a violation of internal revenue laws or tax fraud laws.
Do I have to be terminated to be retaliated against?
No. Retaliation comes in many forms. While termination is often the most extreme scenario, an employer may retaliate against a whistleblower by demoting, suspending, threatening, harassing, or treating a whistleblower less favorably than other employees.
What are the remedies for a Taxpayer First Act whistleblower?
If an employee prevails, the employee is entitled to some or all of the following:
- Job reinstatement at the same level of seniority as existed before the whistleblower was retaliated against;
- 200% of the whistleblower’s back pay;
- Lost benefits, with interest;
- Damages for emotional distress and harm to the employee’s reputation;
- Litigation costs, attorney’s fees, and other special damages that resulted from the retaliation.
I feel as though I have been retaliated against. What next?
Our firm’s lawyers have experience in representing employees who have uncovered tax violations and have subsequently been retaliated against. If you feel that your rights as a tax whistleblower have been violated, our firm will provide a free consultation. You may contact us by phone at (205) 588-0699 or at www.beckumlaw.com.