Fascinating article from CNN money about IRS rewarding people who tell on their exes/bosses/aquaintances and such to the IRS
Here are some highlights from the article
The Program
The IRS’s informant program has been around for more than 140 years. If you suspect a person is committing tax fraud and report it, you could receive up to 15% of the amount that has been underpaid, with a maximum award of $10 million.
In 2006, the IRS really started cracking down on big time cheaters and introduced a new whistle-blower program, in which informants are paid a minimum of 15% and a maximum of 30% of the amount owed.
But there’s a catch: In order to collect a reward, the taxes, penalties and interest in dispute must add up to at least $2 million. And if the suspected tax evader is an individual, his or her annual gross income must exceed $200,000.
The Informants
In this program, the most common informants tend to be dissatisfied middle-ranking employees in big companies, said Tim Gagnon, an academic specialist of accounting at Northeastern University.
While the names of informants aren’t made public, Gagnon said that a person’s identity often becomes obvious based on the proof provided.
Why do people do it?
Some feel angry about other people being above the law and getting away with it. “They want to stop the fat cats from getting rich at the taxpayer’s expense,” he said.
Others simply feel morally obligated to let someone know what’s going on, said Scott. “They really feel like they’re doing the right thing,”
