Bradley C. Birkenfeld was a private banker at the Swiss bank, UBS. In 2007, he began giving U.S. authorities detailed descriptions of the ways in which UBS was promoting tax evasion. He also confessed to smuggling a client’s diamonds inside a tube of toothpaste. According to Birkenfeld, he decided to become an informant when he learned that the bank’s activities were illegal and reporting it to the compliance office had no effect. In 2008, he was convicted of conspiracy for having withheld information about his top client, a property developer, and was sentenced to 40 months in prison. While still in jail, Birkenfeld was awarded $104 million for the role he played in exposing UBS. To date that is the largest amount awarded by the Internal Revenue Service (IRS). The UBS paid a $780 million dollar fine and agreed to give the IRS thousands of names of individuals suspected of evading U.S. taxes. The IRS expects to recoup billions of dollars in unpaid taxes as a result of the information that Birkenfeld provided.
1. Is it appropriate for a convicted felon to reap rewards from reporting someone else’s crimes?
2. Should the IRS continue to offer rewards for providing information about tax evaders?
3. Was this record-setting reward too big? Was it too small? Support your answer
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