Customers who sell their claims will also transfer their rights to collect proceeds from any class-action lawsuits stemming from the bankruptcy.
The youngest members of the gangs were paid to sell the drugs on the streets while more senior members supplied the homes, collected proceeds and brought the cash back to London for further drug purchases.
Now, the whistleblower "shall" receive 15 to 30percentt of the collected proceeds.
The definition of "collected proceeds" has been subject to litigation with the Tax Court finding for the whistleblower (in a case I litigated) that collected proceeds was a term of broad applicability (Whistleblower 21276-13W v. CIR).
The Tax Court rejected that position in its opinion in August – finding that the law was broad and that the term "collected proceeds" is sweeping – encompassing penalties, fines under Title 18 and 31 as well.
Unfortunately, the IRS didn't embrace the Tax Court's commonsense decision on the definition of "collected proceeds" (which was actually how the IRS had managed the program historically for years and years).
Congress in an important bipartisan amendment sponsored by Senators Grassley and Wyden (D-OR) confirmed the Tax Court's ruling in this case and clarified that collected proceeds also encompassed FBAR penalties as well.
As I've discussed in an earlier article for Forbes, this is widely recognized as a landmark case for the tax whistleblower program -- dealing with the issue of "collected proceeds". In short, the question in this case is whether the whistleblower is going to get an award based on all the dollars collected by the U.S. government thanks to the information the whistleblower provided.
The Congress (thanks, as always,to Senator Grassley, R-IA) clarified and reaffirmed that the definition of "collected proceeds" (which serves as the basis for mandatory awards to tax whistleblowers under Section 7623(b)) encompasses not just taxes, but also includes criminal and civil tax penalties, forfeitures, fines, etc. as well as FBAR penalties.
The organization notes that 100percentt of the collected proceeds will go toward the Nelson Mandela Centre of Memory.
