PFAdvice recently blogged about a tax fraud reporting program at the IRS  that would pay you anywhere between 1% to 15% of the amount of money the IRS recovers as a result of your reporting. Now, reporting sounds difficult because you need all sorts of information and proof about who you’re reporting (like their social security number, birthday, etc.) and it begs the question, would you sell out someone else for money? Chances are if you’re reporting someone then you probably know them (duh) and if you know their birthday then you probably friends with that person (or you’ve been spying on them), so would you sell them out for $100? (minimum payout).
I’m in the camp that everyone should pay their taxes, albeit minimized as much as legally possible, but I wouldn’t turn someone in for money. If someone was cheating on their taxes to the tune of a few thousand dollars (that’s a lot) and I felt compelled to turn them in (I wouldn’t), I’d do it for $0 compensation. It’s hard to sit on a moral and ethical pedestal fingering tax cheats when you’re getting paid to betray your friends.
Let me know what you think of this… especially if you disagree with me.