IRS Rewards

I read a newspaper article this morning about a program by the IRS whereby people can claim a reward if they report tax fraud resulting in over two million dollars owed the IRS. A couple of lines from the article implied the program was not so rewarding:

So far, none has been paid under the new law.

One informant has been sentenced to prison.

Since the "new laws" went into place in 2006, that reads like an unsuccessful program. However, the IRS website explains current rewards are from older policies and cases reported since 2006 have not been paid out yet due to the legal proceedings. According to its September 2009 report to Congress, the IRS awarded millions of dollars every year and collected hundreds of millions:

In the past fiscal year, 476 submissions resulted in 1246 taxpayer cases opened and 64 allege over $100 million at stake. According to this report there are only 14 IRS analysts working these cases. 1246 cases divided by 14 analysts is 89 per analyst, which amounts to about 4 days per case. Wouldn't want that job, but the department seems effective.

So the program exists, it works, and you can participate. Learn how to file on the IRS site at http://www.irs.gov/compliance/article/0,,id=181292,00.html and keep in mind the following:

• taxpayer that cheated must have gross income above $200,000
• taxes owed must exceed $2,000,000
  
• informants cannot be government employees nor contractors (i.e. IRS agents)
• anonymous and corporate informants cannot receive rewards
• false claims could be prosecuted for perjury
  
• payment is made at the discretion of the IRS