Consumers May Find Fast Cash by Reporting Tax Fraud

Looking for fast cash during tax time could prove to be a wise move. Over the years there have been many people and business owners who managed to scam Uncle Sam. The government knows it. The general public knows it. Now, more than ever, the government is making moves to stop the illegal move of scamming on taxes, and consumers could benefit.

Cheating on taxes

A recent survey done by the IRS Oversight Board showed that 13% of tax-filing Americans believe that cheating on their taxes, reducing tax debt, is acceptable. According to experts, the reason is because of the tightened economy and difficult recession that just passed. It left consumers stingier than ever and looking for a deal—even if that deal is legally questionable. Desperation pushes people to make unwise and risky decisions while hoping they won’t get caught. It seems that is just where a record number of Americans are these days.

The benefit of ratting someone out

The informant program employed by the IRS has been around for well over a century. For anyone who suspects a business or another person is committing fraud, it could mean a good payday. He or she can earn up to 15% of the amount recovered due to underpaid taxes. Anyone can file an issue they know about with the IRS by going to the website or calling the IRS tip line.

Don’t think that it’s easy to throw an ex-boyfriend or former employer under the bus, however. The IRS does require that the informant provides some personal information on the offender and that they have a relatively strong case to prove the infractions. For example, to file a scam the filer needs social security numbers or a business’ tax ID number. The informant will be required to also provide dates and times. Not everyone is privy to the intimate information needed to turn in an alleged scammer. This is the government’s way of sifting through bogus claims, or those that are more fueled by ill feeling, rather than by true illegal activity.

The success of the informant program

The informant program has been successful since 2008 when it officially was implemented by publically announcing its fast cash potential. In that year alone there were over 450 informants, and they pointed out over 1,200 taxpayers and businesses that owed more money to the government than they paid. Government insiders were surprised at the success of the program, along with the number of quality claims it was inundated with almost immediately. Overall, the government has claimed billions of dollars in taxes, penalties and interest as a result of the program.

Who is the informant?

Research is showing that the ones who are doing the informing are mostly middle-level workers who are frustrated. They feel like they aren’t moving up in the company or have nowhere to go in the company. In general, higher level employees have too much loyalty to their employers to turn on them. There is also a group of informants who were investors or business associates of those they turn in. Finally, there is a growing group of people whose motivation for turning in an employer is merely to do the right thing. They want to know that they didn’t turn the other way when they knew illegal activities were happening.

Being careful when turning someone in

Experts warn that reporting an employer isn’t always as simple as filling a few papers and collecting thousands in fast cash, though. For example, a current employee who reports the business owner can’t get fired, but would they feel comfortable remaining at the workplace? And if an employee does blow the whistle, how difficult will it be for future potential employers to trust them? There are a few considerations before ratting out an employer. Though in the end, doing the right thing may be the best option to choose.

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