Home / Taxes / IRS Informants Don’t Get Paid
Print Friendly and PDF

IRS Informants Don’t Get Paid

Written by Gary North on June 26, 2012

In 2006, a law was signed that enabled the Internal Revenue Service to pay informants up to 30% of the unpaid taxes owed by an individual or a firm. The goal, obviously, was to increase revenues. People are afraid of being exposed. Whistleblowers (“snitches”) increase the likelihood of exposure.

The snitches snitched. The IRS did not pay.

Since 2007, at least 1,300 cases were revealed by the informants against 10,000 companies. So far, three informants have been paid. The IRS will not say how much money was paid.


People may think that they will clean up by informing. They won’t. They will get their hopes up, only to be let down.

A similar program run by the Treasury to get people to inform on companies that have cheated the government or the public has paid out a little under $1 billion a year since 1986. Not much.

The Senator who sponsored the 2006 snitch law, Charles Grassley, complained that the IRS is demoralizing snitches. It gets lots of them to inform, Grassley says. It just doesn’t pay them. He thinks they will stop coming forward.

Let’s hope so.

The IRS says it can take up to seven years to receive payment. This year, three to five people will be paid, the IRS says.

In other words, the program does not work.

Continue Reading on www.bloomberg.com

Print Friendly and PDF

Posting Policy:
We have no tolerance for comments containing violence, racism, vulgarity, profanity, all caps, or discourteous behavior. Thank you for partnering with us to maintain a courteous and useful public environment where we can engage in reasonable discourse. Read more.

7 thoughts on “IRS Informants Don’t Get Paid

  1. Surprise! The Gov't demanding you pay your bills but them not paying theirs and cheating you out of your "finders" fee. How novel a new idea. Sarcasm off.

  2. One problem is the number of false claims. I know someone whose ex-daughter-in-law "snitched" on their business thinking they were making a killing and not reporting income… NOT. No one, however, thinks about the cost to the business entity. These people spent $20,000 defending themselves. How much did the "snitch" pay? Zippo, zilch, nada, nothing, zero! What kind of system allows someone to file against someone else with no recourse or responsibility? The United States of America's IRS and Senator Grassley, that's who. I think the "snitch" should bear the cost of the accused if the accused wins the case, but that's not the "American" way. Senator Grassley should stick to taking care of his constituents and keep his nose out of the IRS, or better yet, he should be voted out as well as his stupid law. The potential for abuse is overwhelming on this one.

  3. haroldson says:

    is there anyone who really thinks the government will tell the truth? the government wiil lie to you in a second if it serves their purpose or is to their benefit., there are most likely people in prison who are more honest then the folks in government , reason why, some get caught some don't

  4. goldendragon2012 says:

    False claims? Not a problem! See http://teapartyeconomist.com/2012/06/22/governmen

  5. anonymous "snitch" programs fail to take into consideration two things: first, one of the Bill of Rights provides that I, the accused, have the right to confront witnesses against me in open court. Two, they fail to include any form of accountability for the snitch. When the accused is innocent, he is left with his expenses, lost time, heartache, sleepless nights, with no recourse, and the government entity has wasted ALL the tax money required for the futile investigation.

    This is a lot like the "SWATting" travesty that has become popular amongst certain perverted groups….. those making the false claims, so far, are never brought to justice. Innocent people have died in some of these baseless raids (of course, the courts signing off on the baseless warrants ought to face SOME consequences for negligence in not persuing the total body of evidence for true probable cause)

  6. Hmmm….y'think people aren't reporting things because next to the terrorists from foreign nations, I suspect the IRS is the most hated and feared group in America?


  7. The article is not entirely correct. The IRS does pay informants. I know that for a fact because I processed those informant rewards, as they were called, until I retired 3 years ago. The IRS has to investigate each case individually to determine its legitimacy. That takes time. If found accurate the informant is issued a check based on a percentage of what the taxpayer didn't report and owed.