09252017Headline:

Lansing, Michigan

HomeMichiganLansing

Email David Mittleman David Mittleman on LinkedIn David Mittleman on Facebook David Mittleman on Avvo
David Mittleman
David Mittleman
Attorney • (888) 227-4770

Want To Make Some Extra Cash? Rat out a Tax Cheat

Comments Off

The economy is down, unemployment is up, and times are tough for many families. So it’s natural that as tax season approaches, we’re all trying to get as much money back from the IRS as possible. But what if the IRS offered a special incentive for ratting out your boss, neighbor, or friend who you know is cheating on their taxes? New tax breaks introduced this year could pad your pockets more than before, but snitching on a tax cheat could make you downright rich.

But what if the people you’re ratting out are struggling, too, like so many other Americans? This is a difficult ethical dilemma for which I don’t have the answer, but according to a recent poll by the IRS Oversight Board, 13% of those polled think cheating is acceptable—that’s up from 9% in 2008.

However, the IRS’s informant program isn’t new. In fact, the program has been around for over 140 years and works like this: if you suspect that a person is committing tax fraud, you can report it by filling out a claim on the IRS website, or by mailing in the form, or calling the hotline. The catch is that you must reveal your identity, although it won’t be revealed publicly. The payout is pretty big with the potential of gaining 15% of the amount underpaid, with a maximum reward of $10 million. Of course, there are those cheating exes or pesky neighbors that you might be tempted to seek revenge on—but don’t move too fast—to weed out bogus claims the IRS requires very specific information including the suspected cheat’s social security number, address and date of birth.