The Wall Street Journal has an article about the IRS’s Whistlebower Program, which offers awards to people who turn in tax cheats.
The bigger the amount recouped, the bigger your take. The agency has two whistleblower programs: The small-awards program is for cases involving less than $2 million of tax, and the award can be as high as 15%, though it often is less. The large-awards program is more generous: For cases involving $2 million or more of tax, the reward can go as high as 30%.
Sounds good, but before you rush to turn in someone to the IRS, it should be noted that the IRS only takes up a few whistleblower cases:
So what’s the catch? Among others: The IRS takes relatively few cases, and those it does pick up often take five or more years to resolve. It often takes copious leg work on your part to pique Uncle Sam’s interest. And while the IRS tries to protect whistleblowers’ privacy, there isn’t any legal protection from retaliation by an employer.
(Hat tip to the TaxProf Blog for alerting me to this story.)