Today, We Celebrate NJ Tax Rats and Snitches
There is a day that is recognized today that I believe most people have never heard of. Many Americans, like I did, would think that it’s a joke. Not only…
An IRS Service Center employee demonstrates the preparation of documents at the IRS Processing Facility.
(Photo by Brandon Bell/Getty Images)There is a day that is recognized today that I believe most people have never heard of. Many Americans, like I did, would think that it’s a joke. Not only is it a nationally recognized day in New Jersey, but it has been observed since the late 1700s.
I’m talking about National Whistleblower Appreciation Day. It’s recognized on July 30th because that’s the day in 1778 that the Continental Congress passed America’s first whistleblower law. It was nearly a century later when the first law related to whistleblowers on tax violations was enacted in 1867.
According to the Internal Revenue Office website, in 1996, “a clause was added allowing payments to be made for detecting underpayments of tax as another basis for an informant award and making the payments from proceeds collected rather than appropriated funds.”
National Whistleblower Day
Today, July 30th, on National Whistleblower Appreciation Day, the IRS Whistleblower Office recognizes the role whistleblowers play in supporting the nation’s tax administration. They rely on whistleblowers and the Whistleblower Program to “promote fairness and accountability and collect funds from noncompliant taxpayers.”
I had no idea this practice was encouraged, or that the day and program even existed. This means that you can get a financial award by reporting a neighbor, a friend, a coworker, or anyone else who is cheating on their taxes. It's basically a crime tip hotline used to catch criminals.
If you’re someone who blows the metaphoric whistle, you could get an award if the information you provide results in owed taxes being collected. The amount paid to whistleblowers ranges between 15 and 30% of the tax money collected.
Related: Taxes Highest in New Jersey
The first IRS-issued award was in 2007. Since then, they’ve paid out more than $1.3 billion “based on the successful collection of $7.5 billion from noncompliant taxpayers.”
It seems so slimy, but the IRS claims that it’s a valuable process to prevent tax cheats. It’s been so successful that they’re streamlining the process with a new digital submission portal with direct deposit for whistleblowers.
It’s apparent the program is becoming more popular each year. The amount of reporting and awards has grown every year, with a 13% increase last year.
How much would it take for you to report a tax cheat? Would you even consider it at all?
If you would, you can get more information here.
