As much as I’d like to take an income tax sabbatical, I fork over my fair share of cash to Uncle Sam every April.  You probably do likewise.  It’s not a fun annual event, but someone once said that “Taxes are the price of civilization” and I guess I buy into that to some extent.  I’m not willing to call paying more a patriotic act, but I’m not against paying my fair share.

That being said, my fair share is actually much less than I actually pay.  That’s because a lot of folk swho should be paying out the nose are using whatever sneaky means they can dream up to avoid paying their portion of civilizations’ price tag.

I’m not talking about the folks who design theri financial lives to keep taxes low.  Those folks are playing by the rules.  They’re putting forth an effort to stay on the law’s good side even if those efforts tend to involve reducing their tax burdens.  Their existence is justification for an improved tax code as much as it is anything else.

The folks with whom I have a problem are the ones who are cheating their way of out of paying.  Tax cheats screw everyone out of money.

The IRS, as you’d probablly guess, has an issue with those same scofflaws.  They want their coffers full of tax doug.

In order to create that great hypothetical world where everyone pays what they own, happily, the government must find a way to nail all of those cheaters to the wall.  As we all know, that’s not a very likely scenario.  That’s why our buddies at the Internal Revenue Service came up with their Whistleblower Office.

Basically, the government is paying bounties for information material to proving that someon failed to pay their taxes appropriately.  It’s a paid informer program.  It gives us all a chance to become IRS snitches.  If you turn over the goods on someone who’s not paying his or her legal share, you can get a reward.

If you’re the kind of person that feels okay with reporting Tax Code violations and being a paid government tattletale, don’t get too excited too quickly.  Primarily, the feds are trying to catch the big players.  They don’t seem as interested in expending resources to nail your mother-in-law for fudging a few numbers in gray areas.  They have more interest in outfits who are prepared to report on major companies, like the outfit that “found” a $2B tax cheat.

If you can come up with a violation worth $2M or more, you’re going to qualify for 15% to 30% of what the government recovers in taxes.  That’s a healthy sum.  However, if you’re information is on a small-time cheat, rewards are at the discretion of the government.

And speaking of discretion…  Prosecutorial discretion is alive and well in the Whistleblower Office.  These guys are inundated with reports that so-and-so didn’t report this-and-that.  They actually go after only a relatively small percentage of the tips provided.

So, think twice before you decide to become a tax bounty hunter.  Unless you can get a big fish on the line, it probably isn’t going to be the most lucrative endeavor to pursue.  On the bright side, you can stay anonymous unless Uncle Sam needs you to testify in order to prove their case.

As you can probably guess, I don’t necessarily love this little government foray into turning private citizens into rats.  I’m all in favor of decreasing tax fraud, but I’m not sure that encouraging people to snitch for the sake of some reward money is the best way to go about it.

Instead, we might want to consider coming up with a better tax system.  Or paying for more/better IRS employees in the right areas.  In the meantime, we have the Whistleblower Office.