Plan to reveal your boss’s tax fraud? Here’s what you should know

Question:

My employer keeps two sets of books, one that she submits to the IRS and one that tells the real story. She’s done so for 15 years and is a multimillionaire, though on paper she looks like a struggling business owner. I’m not a real fan of the IRS myself, but my boss has done other things to me that make me hate her and I’d like to blow the whistle.

I’m scared to do so, however, as my boss is very well-connected and vindictive. She would not hesitate to fire me and could make it almost impossible for me to get another job in Anchorage.

Answer:

Your boss would first have to find out that you reported her. The Internal Revenue Service accepts whistleblower tips and fiercely protects the identity of those who alert them to tax fraud. Also, if the IRS collects more than $2 million from your employer based on your whistleblowing, you may receive an award of 10 to 30 percent of what they recover.

I’d suggest you find an attorney who can advise you. Gathering some types of confidential employer business information to support a tax fraud claim, and the ways in which you gain access to the information, can expose you to legal liability or weaken a potential retaliation claim if your boss fires or otherwise comes after you.

Here are some of the questions your attorney will ask: Does your employer have policies related to proprietary business information confidentiality? Do you ordinarily have access to both sets of your employer’s books? Does your employer have a policy against photos and videos and did you violate that policy when taking cellphone screen shots of documents? How did you learn about the two sets of books — was it through overhearing a phone conversation? How sure are you of what you know?

Problem answers to these questions don’t mean you can’t gather what you need and pursue whistleblowing. For example, even if your employer has a policy against taking photos or videos on-site, the National Labor Relations Board’s general counsel has stated that employer rules prohibiting “taking unauthorized pictures or video on company property” may be unlawful because they could prohibit valid attempts to document protected concerted activity. Problem answers do mean you need legal advice as whistleblowing moves you into legal territory and you don’t want to undercut your own case or expose yourself to counter-charges.

Your attorney may also urge you to remain employed. Most government agencies operating whistleblower incentive programs prefer that whistleblowers remain employed, as they can be a “source on the ground” and communicate about their employer’s continuing illegal activities, as well as provide information concerning where evidence is located or being moved to.

Also, don’t give your boss a reason to fire you. Even though you can file a lawsuit alleging a retaliatory firing, if your boss counters that she fired you because of performance problems, poor behavior or insubordination it weakens your likelihood of prevailing. Also, if you get fired, move quickly in reaching out to the IRS. You don’t want to blow the whistle outside the statute of limitations that protects you, and this time period varies between regulatory agencies.

Finally, although Anchorage is a small town, and negative references can damage your job-landing prospects, I can’t imagine a boss so well-connected that she could stop you from getting a job, particularly if you have great references from other employers. If she does, you can sue her for retaliation, and may have a good chance of winning, as reporting tax fraud is a protected activity.

©Dr. Lynne Curry is author of “Beating the Workplace Bully” and “Solutions” as well as owner of the management/HR consulting/training firm The Growth Company Inc. Follow her on Twitter @lynnecury10 or at http://www.bullywhisperer.com.

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