What Rewards Can Whistleblowers Get?
Becoming a whistleblower is a daunting task, especially considering the possible retaliation and other consequences that come with the role.
However, whistleblowing is a valuable act, one that helps companies, big or small, as well as the government, stop people from doing unlawful acts and getting away with them.
To encourage whistleblowers to come forward, different statutes related to whistleblowing include provisions about rewards. Primarily monetary, these rewards not only encourage whistleblowers to cooperate in the ensuing investigation but also help them with the possible retaliation they might face.
1. False Claims Act
The federal False Claims Act is one of the cornerstone laws for whistleblowers. It seeks to prosecute companies that defraud the government in various ways, such as:
- Overcharging the government for a product or service
- Providing the government with a substandard product or service
- Avoiding obligations to pay the government
- Keeping overpayment from the government
When these acts are exposed, the government can recover the money they are owed. Whistleblowers may be eligible for a certain percentage of what the government recovers, as long as they file a qui tam lawsuit.
Here, they will be filing on behalf of the government and, if the government decides to intervene and win, the whistleblower gets a cut. If the government doesn’t intervene but the whistleblower pursues the suit and wins, they will receive a certain percentage depending on the situation.
2. Dodd-Frank Act
The Dodd-Frank Wall Street Reform and Consumer Protection Act is the primary whistleblower law within the financial markets. It aims to prevent fraud and abuse and improves accountability and transparency in order to prevent the 2008 financial crisis from happening again.
Whistleblowers who expose violations of the law within the financial systems under the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) may receive financial incentives. They may be eligible for a percentage of the collected amount if they could assist the government for litigating securities and commodities fraud.
3. IRS Whistleblower Law
While there are plenty of legitimate ways for businesses to minimize their tax liabilities, some take it too far and pay less than what they owe, violating the law. This results in other taxpayers having to cover the shortfall.
Because of this, the IRS created its Whistleblower Program, which aims to encourage people to report significant tax underpayments to the IRS in exchange for monetary reward.
In small cases (the amount in dispute is $2 million or less; gross income of $200,000 or less for an individual) the IRS decides whether or not to give an award. For large cases involving more than $2 million, the whistleblower awards are mandatory under the law. The whistleblower is eligible to receive a percentage of the amount recovered by the IRS.
Understand Whistleblower Rewards Better
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