If you knew that a coworker, neighbor or ex was cheating on their taxes, would you turn them in? The IRS can make it worth your while! Here are the details from CNN Money. A recent poll found that 13% of people think it’s OK to cheat on their taxes, and according to Bill Raabe, a tax expert at Ohio State University’s business school, the temptation to cheat is even stronger when the economy has taken a hit, as it has in recent years. People do what they can to hang on to their money – and the IRS knows that. This is why they’re turning to YOU for help.
The IRS’s informant program has been around for more than 140 years. Here’s how it works: If you suspect that a person is committing tax fraud and report it, you could receive up to 15% of the amount that’s been underpaid. Since there’s no minimum requirement for the amount in question, anyone can file a report in hopes of making an extra buck off of a cheating ex-boyfriend or obnoxious neighbor. The IRS also has a “whistle-blower” program for the big cheaters – those who swindle Uncle Sam out of hundreds of thousands or more, and informants are paid up to 30% of the amount owed!
So who snitches? In this program, the most common informants tend to be dissatisfied middle-ranking employees in big companies, those who feel frustrated about what’s going on and don’t think they have a shot of moving up the ladder. While the names of informants aren’t made public, a person’s identity often becomes obvious based on the proof they provide. Tim Gagnon is an academic specialist of accounting at Northeastern University. He says that you can’t really stay in the shadows when you come forward to claim your reward – so be aware of that. However, it’s not always a hefty reward that motivates people. Some simply feel angry about other people thinking they’re “above the law” and getting away with it, and they want to stop them. So – are you a potential informant? If so, you can download the paperwork you need to make a claim at IRS.gov.