Ernst & Young has been named by a law firm that has filed a submission with the Internal Revenue Service's Whistleblower Office, claiming that one of the accounting firm's Fortune 500 clients improperly reduced its taxes by $1 billion through a series of transactions.

The Ferraro Law Firm filed the submission under Section 7623 of the Tax Code, which allows whistleblowers to collect between 15 and 30 percent of the amount of taxes owed. That would give the whistleblower and its legal representatives up to $300 million if the IRS decides to proceed with the case. Ferraro took the case on a contingency basis.

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