Internal Investigation

SITUATION

FSS was hired by a company to investigate whistleblower allegations to the IRS of underreported revenue.

STRATEGY

FSS investigators analyzed daily sales records, management reports, reports to accountants, financial statements, tax returns and government prepared reports detailing the alleged underreported revenue. Company records consisted of electronic data and manual reports. FSS investigators determined the amount of alleged underreported revenue was significantly lower than determined by government accountants. Additionally, FSS investigators identified significant errors made by the company’s external accountant. FSS’ work product was presented to the IRS and was accepted as the correct amount of underreported revenue.

RESULTS

The company’s case was bolstered by the findings of FSS:

  • Revenues were underreported to the IRS but significantly less than originally alleged and determined by the IRS.
  • Principals of the company avoided significant jail sentences.
  • Fines and penalties were materially reduced.