NEW YORK (CNNMoney.com) — If you knew coworkers, former bosses or exes who cheated on their taxes, would you turn them in? The Internal Revenue Service can make it worth your while.
As tax season nears, we all want to get as much money back from the IRS as possible. And while taking advantage of this year’s new tax breaks will put some extra money in your pocket, snitching on a tax cheat could make you rich.
In a recent poll from the IRS Oversight Board, 13% of those surveyed think cheating is acceptable, up from 9% in 2008. As the recession puts the squeeze on household finances, the lure of fudging on a tax return is even greater.
“In a down economy, the temptation to cheat on taxes is much stronger because people are in more desperate situations more often,” said Bill Raabe, a tax expert at Ohio State University’s business school.
More people may be just as desperate to turn in a business, rat out an ex-spouse or report a colleague to collect a reward.
Small-time crooks: The IRS’s informant program has been around for more than 140 years. If you suspect a person is committing tax fraud and report it, you could receive up to 15% of the amount that has been underpaid, with a maximum award of $10 million.
Informants are required to complete a claim and mail it to the IRS. The form is available on the IRS Web site, or you can call the agency’s fraud hotline at 1-800-829-0433 for instructions. While you must reveal your identity to the IRS, your name will not be made public.