UBS Whistleblower May Get Billions

[Number Six]

http://www.nytimes.com/2009/11/27/busin ... eld&st=cse

[jg]

See also November 27, 2009, From Snitch to Rich? The Case of UBS’s Brad Birkenfeld by Ashby Jones
at http://blogs.wsj.com/law/2009/11/27/fro ... irkenfeld/

It might sound like a pretty penny for a convicted felon, but some experts believe Birkenfeld, 44, has a good chance to cash in.

[Judge Roy Bean]

If he does receive a monetary reward for being a whistleblower, is that amount taxable?

Yep.

[Number Six]

Mr. Birkenfeld's ship just came in:

"U.S. tax authorities have awarded $104 million to a whistleblower in a major tax fraud case against Swiss bank UBS AG that widened a government crackdown on Americans avoiding taxes in Switzerland, his lawyers said on Tuesday.



"Bradley Birkenfeld, freed last month from prison, was not present at the news conference where his attorneys announced the reward made under an Internal Revenue Service whistleblower program that has come in for some criticism in Congress.



"Birkenfeld had sought a large payout for his role in a tax-dodging case that resulted in early 2009 in UBS entering into a deferred prosecution agreement and paying $780 million in fines, penalties, interest and restitution."

http://www.zerohedge.com/news/jailed-ub ... nt-holders

[Noah]

If he does receive a monetary reward for being a whistleblower, is that amount taxable?

Yep.

Little bit of something is better than all of nothing.

[Famspear]

I'm lazy, so I'll compute the tax based on the 2011 software.

The federal income tax on a recovery of $104,000,000, had it been received all in 2011, for a single person with no dependents, would have been about $36,373,989. That assumes only a regular standard deduction and personal exemption. That assumes no self-employment tax liability (he wasn't in the trade or business of being a whistleblower).

That leaves the guy $67,626,011 to scrape by on.

If he invests that and earns only 1% simple interest per year, that's $676,260.11 of interest income per year.

That $676,260.11 of interest income is pre-tax, of course.

[Number Six]

In his book "How to Get Rich" Felix Dennis (founder of Maxim) breaks down wealth from the $100,000-$400,000 "comfortable poor" to the over $200MM and above; "the filthy rich" and the "super rich". Birkenfeld now is between "the rich" and the "seriously rich" in Dennis' jargon. Interestingly, Dennis shares his checks to "Inland Revenue" many well into the millions per term on the inside covers of the book. How many UBS clients ended up downgraded from higher "rich" categories maybe back into the middle class (gasp) is the other side of this story.

[Burzmali]

Frankly, there is ONLY one person's wealth I give a damn about. Mine. I do not care about anyone else's wealth.

If only the ultra-rich shared your philosophy.

[Burzmali]

Frankly, there is ONLY one person's wealth I give a damn about. Mine. I do not care about anyone else's wealth.

If only the ultra-rich shared your philosophy.

Actually, it should be everyone. Too many people are envious of what others have and because of that want to try and tear those that seemingly have more, down to their level, whether through taxes, so called "redistributions" of wealth, or even using religion.

And here is a news flash for most of humanity, almost all of us will NEVER, EVER have the skill, luck, talent, and determination to be the next Richard Branson, or Steve Jobs, or Carlos Slim.

Wandering a bit off topic but...
The thing is, I don't really see a problem with people wanting what their neighbors have, that's your run of the mill materialism that runs the economy. In this case the wealth is desired to buy stuff and the industry needed to make stuff is what makes the economy turn. The ultra-rich don't need more wealth to buy stuff, they can literally buy anything that money can buy and generally don't compete over things that can simply be bought. Instead the ultra-rich compete like teenagers with the latest Call of Honor: Shoot the Dark Skins title and try to top the wealth leaderboards.

[Burzmali]

The ultra-rich don't need more wealth to buy stuff, they can literally buy anything that money can buy and generally don't compete over things that can simply be bought. Instead the ultra-rich compete like teenagers with the latest Call of Honor: Shoot the Dark Skins title and try to top the wealth leaderboards.

And this concerns/bothers you because? Their actions affect you how?

Basically, I am not particularly enthused by the country being run people with the same mindset as teenagers trying to inflate their epeens.

[Demosthenes]

Birkenfeld will likely lose another third to lawyer contingency fees. Even so, he's now a rich snitch.

[notorial dissent]

That's always assuming that he is alive to enjoy it. Considering some of the people he "snitched" on, that could well be problematical. Some of them take a very dim view to this sort of thing, and aren't known for their sense of humor, except in certain matters.

[Number Six]

That kind of money buys a lot of security which is an advanced science these days. Maybe "Observer" in the Virgin Islands will be getting some company.