Since the Civil War, the federal government has offered financial rewards to encourage private individuals to come forward with evidence of unlawful conduct. The most successful of these programs is set forth in the False Claims Act (FCA), which includes a “mechanism for private whistleblowers to bring legal action on behalf of the government and to earn ‘bounties’ where such actions lead to the recovery of government funds.”1 The FCA was amended in 1986 to guarantee a minimum reward to individuals whose disclosures lead to recoveries by the federal government. Since that time the government has collected more than $27 billion in settlements and judgments, and has paid out almost $2.9 billion in whistleblower awards.2
Historically, the FCA has excluded tax and securities fraud cases.3 Congress first enacted a provision aimed at encouraging individuals to report suspected tax fraud in 1867. That statute, recodified as §7623 of the Internal Revenue Code in 1954, was viewed as being “particularly ungenerous,”4 and was amended in December 2006 in hopes of rectifying its perceived shortcomings.5
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